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The  break  -  up  of  an  Empire  of  four  hundred 
millions  of  people  is  an  event  that  has  no  parallel 
in  history.  When  I  undertook  the  Mission  con- 
fided to  me  by  tKt  President  of  the  Associated 
Chambers  of  Commerce,  I  frankly  admit  that  I 
did  not  fully  grasp  the  dimensions  of  a  problem 
the  solving  of  which  is  only  possible  by  clear 
^  thought  and  decisive  action — qualities  that  have 

1  been  conspicuously  absent  from  our  dealings  with 

China  during  the  late  difficulties  in  the  Far  East. 
Although  my  Report  deals  mainly  with  trading 
and  commercial  questions,  it  cannot  exclude  con- 
siderations of  high  policy,  and  I  am  compelled  to 
travel  outside  the  limits  originally  defined  for  the 
scope  of  my  Mission.  In  framing  my  Report  it 
is  impossible  to  ignore  conditions  inseparable  from 
the  Commercial  Question  —  viz.,  matters  relating 
to  international,  racial,  and  political  complications. 
The  British  and  American  public  have  been  quite 
bewildered  by  the  controversy  which  has  raged 
during  the  last  year  over  the  relative  merits  of  the 
"  Open  Door  "  and  the  "  Sphere  of  Influence." 



Investigations  on  the  spot  have  convinced  me 
that  the  maintenance  of  the  Chinese  Empire  is 
essential  to  the  honor  as  well  as  the  interests  of 
the  Anglo-Saxon  race,  and  I  hope  that  when  the 
British  and  American  people  are  acquainted  with 
the  facts  as  a  whole,  they  will  be  similarly  con- 

The  Diplomatic  and  Commercial  prestige  of 
Great  Britain  has  been  affected  by  the  events^  in 
Northern  China,  but  only  in  a  slight  degree  when 
compared  with  the  loss  of  good  name  involved  by 
forcing  concessions  from  China  when  she  is  pros- 
trated by  involuntary  surrenders  to  Powers  stronger 
than  herself.  Hitherto  our  policy  has  been  to  be- 
friend weaker  nations.  It  cannot  be  said  that  this 
policy  has  lately  been  followed  in  the  Far  East. 
We  have  taken  advantage  of  the  impotence  and 
distress  of  the  authorities  and  people  of  China  to 
advance  our  own  interests,  and  consequently  China 
has  become  suspicious  of  Great  Britain;  this  is 
not  only  natural  but  inevitable. 

Our  proceedings  are  certain  to  encompass  the 
doom  of  China,  and  equally  certain  to  produce 
international  strife.  Mastery  in  Asia  unjier  a 
system  of  "  Spheres  of  Influence  "  will  not  be  de- 
termined by  effusion  of  ink.  A  straightforward 
recognition  of  the  principles  of  freedom,  fair 
dealing,  and  equality  of  opportunity  which  have 
made  our  position  in  the  world,  coupled  with  reso- 
lution and  vigor  in  carrying  these  principles  out, 
will  not  only  preserve  the  integrity  of  the  Chinese 



Empire,  but  will  conduce  more  largely  to  our 
interests  than  the  present  plan  of  taking  what 
does  not  belong  to  us  because  other  Powers  are 
doing  the  same.  Unless  a  definite  settlement  of 
the  problem  in  the  Far  East  is  thought  out  and 
brought  into  efifect,  war  is  certain,  and  the  whole 
civilized  world  may  be  compelled  to  share  in  the 

No  one  knows  better  than  myself  the  inherent 
deficiencies  of  this  Report.  I  claim  for  it,  how- 
ever, the  single  merit  of  being  an  honest  endeavor 
to  examine  and  set  forth  the  conditions  under 
which  war  will  alone  be  avoided,  and  will  at  the 
same  time  secure  the  trading  and  commercial 
interests  not  only  of  the  British,  but  the  whole 
Anglo-Saxon  race. 


I  HAVE  thoroughly  investigated  the  matters 
referred  to  me  by  the  President  of  the  Associated 
Chambers  of  Commerce,  in  his  letter  to  me  of 
August  I,  1898  {vide  Appendix),  and  in  further- 
ance of  that  object  I  have  obtained  a  very  large 
amount  of  information  connected  with  trade  in 
China,  which  I  trust  will  be  interesting  to  the 
commercial  communities  of  Europe  and  America. 

I  have  not  attempted  to  give  these  rough  notes 
of  travel  any  literary  style.  There  has  only  been 
time  to  make  a  plain  statement  of  valuable  facts 
for  immediate  use.  My  professional  life  has  not 
qualified  me  to  give  anything  more  than  what  I 
consider  to  be  a  common-sense  judgment  on  the 
finer  issues  of  financial  and  commercial  questions. 
I  have  tried  to  see  the  interests  of  the  trader  in 
China  through  his  own  eyes,  and  with  my  own  I 
have  looked  for  the  reasons  which  he  has  given 
me  for  his  statements. 

I  arrived  at  Hong  Kong  30th  September,  1898, 
and  left  Shanghai  9th  January,  1899.  During  that 
time  I  visited  those  places  in  China  where  British 



communities  reside,  and  wherever  there  was  a 
Chamber  of  Commerce,  convened  meetings,  ob- 
tained the  opinions  of  the  members,  and  received 
a  number  of  resolutions  {vide  Appendix). 

I  enclose  copies  of  these  resolutions,  together 
with  the  names  of  the  places. 

With  the  exception  of  three  so-called  armies,  I 
inspected  the  whole  military  force  of  China,  and 
by  permission  of  the  generals  put  the  troops 
through  various  movements,  in  order  to  ascertain 
their  efficiency. 

I  visited  every  fort,  every  arsenal,  with  one 
exception,  and  all  the  naval  and  military  schools, 
also  the  ships  of  both  the  Chinese  fleets — viz.,  the 
Peyang  and  Nanyang  squadrons,  and  the  one 

A  Report  on  all  these  matters  is  enclosed.  I 
have  not,  however,  entered  fully  into  the  degrees 
of  effectiveness  which  came  to  light,  as  it  would 
not  be  courteous  to  the  Chinese  Government,  who 
frankly  asked  me  to  inspect  the  whole  of  their 
naval  and  military  organization,  and  to  inform 
them  in  what  particulars  they  were  inefficient  or 
ineffective,  and,  further,  asked  me  what  suggest- 
ions I  would  make  as  a  remedy.  But  enough 
will  be  found  in  the  Report  to  show  that  no  se- 
curity at  present  exists  for  the  future  development 
of  British  trade  in  China. 

At  Peking  I  was  received  on  two  occasions  by 
the  Tsung-li  Yamen,  and  visited  Prince  Ching 
and  his  Excellency  Li  Hung  Chang* 

•  •  • 



I  also  visited  six  of  the  eight  Viceroys  of  the 
Great  Provinces. 

Everywhere  the  Chinese  authorities  received 
me  with  extreme  courtesy  and  ceremony,  the  great 
Mandarins,  Governors,  Generals,  Admirals,  Taotais, 
and  all  officials  treating  me  with  marked  distinc- 
tion. This  was  owing  to  a  keen  appreciation  on 
their  part  of  the  power  and  influence  of  the  trad- 
ing and  commercial  communities  of  Great  Britain, 
which  they  were  aware  I  had  the  honor  to  repre- 

Everywhere  friendliness  towards  Great  Britain 
and  her  people  was  freely  expressed,  and  con- 
siderable interest  exhibited  as  to  the  Report  I 
should  be  able  to  render  to  the  Associated  Cham- 
bers of  Commerce  in  London. 

Although  the  Mission  I  undertook  was  essen- 
tially commercial,  I  found  that  it  was  absolutely 
impossible  to  ignore  political  issues.  In  China 
commercial  and  political  questions  cannot  be  sep- 
arated. I  have,  therefore,  endeavored  to  show  in 
my  Report  that  future  commercial  success  and 
prosperity  depend  entirely  upon  the  treatment  of 
the  present  political  situation.  In  my  humble 
opinion — an  opinion  strongly  supported  by  every 
British  community  in  China — the  policy  adopted 
by  the  British  Government  now  will  determine 
the  life  or  death  of  British  trade  with  China  in 
the  future. 

As  the  trading  interests  of  Japan  and  the  United 
States  are  identical  with  those  of  Great  Britain, 



with  regard  to  the  future  development  of  trade 
with  China,  I  travelled  home  through  those  two 
countries  in  order  to  obtain  the  opinions  of  the 
various.  Chambers  of  Commerce  on  this  important 

An  account  of  the  result  of  my  inquiries  in  those 
countries  is  herewith  enclosed. 

I  have  endeavored  to  give  detailed  facts,  as  per- 
sonally investigated  or  seen,  in  order  to  illustrate 
all  statements  contained  in  the  Report. 

In  my  Report  I  have  confined  myself  to  those 
points  which  affect  British  trade  as  a  whole. 
Whenever  individual  industries  are  touched  upon 
it  will  be  found  that  other  British  trading  interests 
are  interlocked  with  such  individual  industry.  I 
have  touched  very  lightly  on  statistics  connected 
with  Returns  of  Trade  or  Trade  Reports,  such 
being  already  in  existence  either  in  able  Consular 
Reports,  or  in  the  Returns  Imperial  Maritime  Cus- 
toms China  (Statistical  Series),  or  in  the  valuable 
report  of  the  Blackburn  Chamber  of  Commerce, 
1 896- 1 897. 

I  have  had  numerous  interviews  with  Chinese 
officials  on  questions  connected  with  British  trade 
and  commerce.  A  summary  of  such  interviews 
will  be  found  under  the  names  of  the  localities 
where  they  occurred. 

No  opportunity  has  been  lost  on  my  part  of 
seeking  interviews  with  representatives  of  all 
foreign  nations  holding  trading  interests  in  China. 
Consuls,  merchants,  engineers,  etc.,  belonging  to 


Russia,  France,  Germany,  America,  Japan,  etc., 
have  been  visited,  and  every  efiFort  has  been  made 
on  the  part  of  your  Mission  to  promote  friendly 
feeling,  and  to  prove  that  the  policy  of  Great 
Britain,  as  expressed  in  the  "Open  Door,"  is  not 
a  selfish  policy  for  the  British  Empire,  but  one 
which  must  equally  benefit  the  trade  of  all  nations. 

That  the  Mission  has  been  successful  in  promot- 
ing friendship  is  evinced  by  the  fact  that,  on  the 
evening  of  the  day  before  I  left  China,  I  was  enter- 
tained by  the  whole  of  the  Foreign  Communities 
of  Shanghai,  when  a  resolution  (pide  Appendix) 
was  passed  by  these  communities  proving  the  re- 
spect and  interest  held  with  regard  to  the  proceed- 
ings of  the  Mission. 

Through  all  this  undertaking  I  have  known  that 
my  Report  might  be  seen  by  two  classes  of  per- 
sons  interested  in  China — namely,  those  who  have 
already  invested  capital  in  that  country,  and  those 
who  may  be  going  to  invest  I  am  aware  that  the 
interests  of  those  two  classes  cannot  always  be 
identical.  I  have  met  the  merchant  who  says 
"Speak  out,"  and  I  have  met  the  financier  who 
says  "  Speak  gently."  My  duty  is  a  simple  one — 
to  speak  the  truth.  I  have  seen  men  in  China 
representing  every  class  of  commercial  interest, 
and  have  recorded  here,  as  accurately  as  I  could, 
the  ideas  they  hold,  and  the  reasons  which  they 
give  for  holding  them. 

The  thanks  of  the  Associated  Chambers  of  Com- 
merce are  due  to  the  following  gentlemen,  who 


rendered  me  most  valuable  assistance  during  my 
travels:  Mr.  Thomas  Jackson,  Chief  Manager  of 
the  Hong  Kong  and  Shanghai  Bank,  who  kindly 
made  all  arrangements  for  my  comfort  at  every 
place  I  visited  where  there  was  a  branch  of  the 
Hong  Kong  and  Shanghai  Bank. 

Mr.  W.  Cartwright,  late  Commissioner  of 
Customs,  who  accompanied  me  on  my  journey 
up  the  Yangtse  Valley,  and  by  his  perfect  knowl- 
edge  of  the  Chinese  language,  and  of  the  Chinese 
themselves,  largely  contributed  to  the  success  of 
my  interviews  with  the  Viceroys  and  other  officials. 

All  H.B.M.  Consuls  with  whom  I  came  in  con- 
tact, and  particularly  Consul-General  Brenan,  Con- 
sul Bourne,  Consul  Fraser,  and  Consul  Hosie. 

Mr.  C.  W.  Kinder,  Chief  Engineer  of  the  Chinese 
Imperial  Railway  from  Peking,  via  Tientsin,  to 
Shanhaikwan;  Messrs.  Jardine  &  Matheson,  and 
Messrs.  Butterfield  &  Swire,  who  placed  their 
steamers  at  my  disposal  whenever  opportunity  oc- 

The  thanks  of  the  Association  are  also  due  to 
my  secretary,  Mr.  Robin  Grey,  for  his  untiring 
energy  and  hard  work  during  the  whole  of  my 
travels — work  rendered  more  difficult  by  the  fact 
that  one  of  my  secretaries,  Mr.  McDonald,  nearly 
died  of  fever  at  Hankow,  which  necessitated  my 
leaving  him  behind  during  the  most  important 
stages  of  the  journey.  The  Report  would  have 
been  rendered  before  but  for  this  mischance. 

• « 



Dimensions  of  Problem — Impossibility  of  Ignoring  Political  Questions — 
Present  Policy  Certain  to  Encompass  the  Doom  of  China — War  Cer- 
tain if  Continued — Report's  Deficiencies  and  Aims P<igi  iii 


Scope  of  Mission — Report  not  Literary:  Common-sense  Judgment  on  Facts 
— Convened  Meetings  of  Chambers  of  Commerce — Visited  Armies,  Forts, 
Viceroys,  etc. — Everywhere  Friendliness  to  Great  Britain — Travelled 
Home  via  Japan  and  America — Industries  Touched  Upon,  and  Why — 
Interviewed  Chinese  Officials  and  Foreign  Traders  —  Knew  Report 
Might  be  Seen  by  Two  Classes — Present  and  Future  Investors — Persons 
to  whom  Thanks  are  Due  for  Assistance vii 


Arrival,  and  Visits  to  Foreign  Ministers — Invitation  to  Visit  Port  Arthur- 
Visit  to  Tsung-li  Yamen — Prince  Ching's  Friendliness  to  Great  Britain 
— Pointed  Out  that  Commercial  Communities  Wanted  Trade,  not  Ter* 
ritory — No  Real  Protection  for  Trade  without  Reorganization  of  Chinese 
Army— Britain,  with  64  Per  Cent,  of  Trade,  Anxious  about  Security — 
British  Officers  Should  be  Employed — Other  Nations  to  Help — Tsung-li 
Yamen  Praises  Sir  Robert  Hart — Return  Visit  of  Tsung-li  Yamen — 
Emperor  and  Empress  Agree  to  Suggestions — Two  Thousand  Troops 
to  be  Drilled  in  Yangtse  Valley — Viceroy  Chung  Chi  Tung  Ordered  to 
Confer — Official  Interpreter:  Why  Employed — Interview  with  His  Ex- 
cellency Yung  Lu  in  re  Army  Reorganization — Pressed  to  Remain  for 
Further  Interviews — Hu  Yen  Mei*s  Fears  for  China — Interviews  with 
Li  Hung  Chang  and  Sir  Robert  Hart — British  Prestige  Below  Rus- 
sian— British  Influence  is  in  Inverse  Ratio  to  British  Trade I 


Arrival  at  Tientsin — Protest  of  Chamber  of  Commerce  Against  "  Spheres 
of  Influence  ** — Trade  of  Tientsin  Increasing — Energy  of  British  Mer- 

•  •  • 



chants  Responsible  for  it— Memorandum  of  British  Merchants  Com- 
plaining of  Lack  of  Policy — Anxiety  of  Merchants,  and  Unwillingness 
to  Invest  Farther  Capital — Not  Afraid  of  Legitimate  but  of  Military 
Diversion  of  Trade  by  Russia — Alienation  of  Chinese  Territory  would 
Ruin  Trade  built  up  by  British — Interview  with  His  Excellency  Yu 
Lu,  and  the  Taotai  Li — Helplessness  of  China — Good  Feeling  Between 
British  and  German  Merchants  in  Tientsin Page  14 


Particulars  of  the  Shanhaikwan-Newchwang  Railway — A  Further  Extension 
to  Sin-min-thun  to  Join  Russian  Line  Projected  —  Interesting  Work- 
shop and  Locomotive  Statistics  for  Railway  Men — Why  American  En- 
gines are  Preferred  to  English — Automatic  Couplings  are  used — En- 
gines Building  in  China — Particulars  of  a  Coal-mine  at  Tongshan. .  23 


Arrival  at  Newchwang — British  Merchants'  Alarm  for  Future — Trade  of 
Newchwang  Compared  with  Yangtse  Ports — Meeting  of  British  Mer- 
chants— Fears  of  Annexation  by  Russia — British  Concession  Wanted 
— Mineral  Wealth  of  Manchuria  —  Russian  Military  Position,  and 
Evasion  of  Chinese  Customs — Nothing  to  Prevent  Russia  Marching 
into  Chihli — Letter  of  Merchants — Reforms  Necessary  for  Opening  up 
Interior  Suggested — Merchants'  Complaints  and  Needs — Great  Coal- 
fields, etc.,  in  Manchuria — British  Consular  Agent  should  be  Sta- 
tioned at  Kirin — Ways  in  which  British  Trade  may  be  Damaged — It 
should  not  be  Abandoned — Manchuria  a  Splendid  Country — British 
Trade  Considerable,  Russian  Nil — Manchuria  Russianized  would  be 
a  Prelude  to  a  March  on  India — British  Capital  Invested  in  Manchuria 
would  Strengthen  Our  Position — Russia  in  Manchuria,  and  Her  Rail- 
way Material  not  Paying  Duty — Importance  of  this  Exemption  to 
Foreign  Bondholders,  as  it  Curtails  the  Income  Hypothecated  to  For- 
eign Countries — Russian  Flag  Hoisted  in  Manchuria — Treatment  of 
Chinese  Peasants  —  Their  Railway,  Mainly  Strategic,  will  take  Five 
Years  to  Complete — Material  Being  Bought  in  America — How  Rail- 
way will  Affect  Newchwang — Land  Dispute  Between  Russians  and 
British  at  Newchwang — Treatment  of  Chinese — British  Missionaries* 
Fears  —  *' Manchuria  Russian  in  all  but  Name"  —  Troops  Pouring 
into  Manchuria  —  The  Russian  Railway  Agreement  —  Open  Door  in 
Manchuria  Depends  on  Russian  Good-will — Assurances  (of  no  Value) 
Against  Military  Strength  —  Newchwang  Key  of  Position — Customs 
Revenue  at  Newchwang  Increasing — Foreign  Imports — British  Trade 
and  Indian  Yarn  Going  Up^English  Cotton-Goods  Losing  Ground  in 
Favor  of  American — Metals  and  Kerosene — Russian  Oil  Sold  as 
American — Exports  of  Silk — Bean  and  Opium  Trade — Mineral  Wealth 
Very  Great,  Coal  and  Gold  Found  in  Large  Quantities — Silver-mines 
in  Manchuria — Factories  Started — Review  of  Trade  in  1898:  Figures 
not  yet  Published — Opening  of  new  Chinese  Railway  Expected  this 

Year. 32 





Arriya)  at  Chefoo— Memorandum  of  British  Merchants — Field  of  Devel- 
opment in  Cotton  Goods — Gold  and  Coal  Mines  in  Province — Com- 
plaints of  Apathy  Displayed  by  British  Consuls — Alarm  of  Merchants 
Lest  Kiao-chow  Should  Divert  Trade  —  Shantung:  One  of  the  Few 
Provinces  where  Railways  will  Pay  at  Once — Visits  to  Factories  and 
Men-of-war — Opposition  of  Chinese  to  Machinery P<^g^  65 


Visit  to  Wei-hai-Wei — Opinion  as  to  Its  Naval  Capabilities  —  A  Good 
Mercantile  Port,  but  for  Our  Consent  to  Germany  Closing  the 
Door 71 


Invitation  from  Prince  Henry — Opinion  as  to  Capabilities— Land  Regula- 
tions at  Kiao-chow 73 


Arrival  at  Shanghai — ^Anxiety  of  British  Merchants  for  Future — Disadvan- 
tages of  New  Navigation  Laws — Right  of  Interior  Residence  Denied — 
Viceroys  Complained  of  Interference  with  Provincial  Revenue — China 
Association  Meeting — Reasons  for  Limited  Expansion  of  Trade  with 
China  Set  Forth — No  Complaint  Against  Imperial  Maritime  Customs 
— Treaties  Imperfect — Transit-pass  System — Intentions  of  Lord  Elgin 
— Result  an  Utter  Failure — In  Many  Parts  Transit  Passes  Ignored — 
Merchants  Tired  of.  Complaining — Trade  in  South  Has  Shifted  from 
British  to  French  Route  owing  to  French  Energy — Right  of  Residence 
in  Interior  Forbidden,  which  Hinders  Trade — China's  Necessities  In- 
creasing—  Tariff  to  be  Revised,  but  no  Reforms  Proposed  —  China 
Wants  Money,  but  Foreign  I^enders  Want  Security,  which  China  Can- 
not Offer — A  Strong  Government  in  Peking  a  First  Necessity — British 
Government  Ought  to  Have  a  Policy — Whether  China  Remains  Intact 
or  be  Partitioned,  Necessity  for  Reforms  are  the  Same  -—  Dangers  of 
Partition  Policy — Great  Britain  Should  Lead  the  Movement  for  Reform 
— Difficulties  Great,  but  Other  Nations  Should  be  Asked  to  Co-operate 
—  Chambers  of  Commerce  Meeting  —  Points  in  Address  Affecting 
Trade — Bank  of  China  Case,  Affecting  Validity  of  All  Contracts  with 
Chinese  —  Should  be  Dealt  with  Promptly  by  Home  Government  — 
Chinese  Officials  at  Fault — Cotton  Trade  of  Shanghai :  Chiefly  Amer- 
ican in  Origin  but  British-owned  —  America  Increasing  Her  Interest 
and  Competing  Seriously  with  Lancashire — British  Trade  not  Injured 
so  Much  as  British  Manufacturer — Few  American  Firms,  and  60  Per 
Cent,  of  American  Trade  British- owned  and  Under  Our  Flag — Three 
Interviews  with  Marquis  Ito,  Who  Supported  *'Open  Door"  Policy — 
Thought  Corea  Should  be  Included — Reorganization  of  Army  Neces- 



sary— Interviewed  His  Excellency  Kwei  Chun  :  Conversation  r^  China's 
Condition — Extension  of  Settlement — French  Pretensions  and  Opposi- 
tion— Origin  of  Extraordinary  French  Claims  at  Shanghai — Informed 
Viceroy  of  Nanking,  if  French  Claims  Granted,  would  Cause  Trouble — 
Disturbances  Fatal  to  Trade  would  Follow — Dangers  of  French  Policy 
— French  Demands  at  Paotung — Resolution  of  Foreign  Community- 
Interviews  with  Taotai,  and  also  Missionaries — Interchange  of  Views- 
French  Jesuits  in  Favor  of  **  Open  Door"  Policy,  and  Declared  no  Dif- 
ficulties in  it Page  76 


Arrival  at  Nanking  in  Chinese  Cruiser — Received  with  Great  Pomp — 
Viceroy  Afraid  of  Disturbances  —  Distress  from  Floods  and  Anti- 
foreign  Feelings  —  Thought  Reorganization  of  Army  would  Lead  to 
Dismemberment  of  China  —  Commercial  Understanding  would  Assist 
China,  but  Russia  would  not  Permit — Correspondence  with  His  Ex- 
cellency on  Army  Question — Change  of  Views — Description  of  Naval 
and  Military  Colleges — Money  Well  Expended  :  Waste  of  Money,  how- 
ever, on  Naval  College  in  Country  with  no  Fleet — Interesting  Letter 
from  the  Viceroy  Liu  Kwen  Yi 106 


Visit  to  Wuhu  —  Memorandum  in  Favor  of  "Open  Door"  —  Merchants 
Nervous  —  Coal  in  Locality,  but  Authorities  will  not  Allow  it  to  be 
Worked 115 


Visit  to  Port — Received  by  Residents — Principal  Export  Declining — Min- 
eral Riches,  Property  of  British  and  Americans,  not  Allowed  to  be 
Worked 117 


Visit  to  Chinkiang — Useful  Memorandum  of  the  Chamber  of  Commerce — 
Trade  of  Chinkiang — Success  of  Transit-pass  System  Here — Exports 
Must  be  Developed — New  Inland  Navigation  Rules  Defective — Cargo 
has  not  been  Conveyed  Owing  to  Defects  in  Rules  —  Condition  of 
Grand  Canal  Bad — Rioting  with  Connivance  of  Authorities — British 
Flag  Should  be  Allowed  by  Consuls  on  All  British  Merchants'  Launches 
— Right  of  Residence  in  Interior  Necessary  to  Push  Trade  —  Com- 
plaints as  to  Yangtse  Regulations  and  Preferential  Rights — Serious  Com- 
plaints as  to  British  Consuls  at  Chinkiang — Also  as  to  Native  Officials 
Who  Delay  Business  to  Their  Own  Advantage — Suggestions  by  Mer- 
chants for  Reform  of  Abuses  Complained  of — British  Prestige  at  a  Low 
Ebb  —  Gunboats  Wanted  on  Waterways  —  Charges  Against  Consuls 
Hl^ve  Some  Foundation  in  Fact — Trade  of  Chinkiang  in  1898  Shows 


General  Decrease  All  Round — Reasons  for  Such  Decline:  Insecurity, 
Scarcity  of  Capital,  and  Floods — Factories  and  Local  Trade — ^Japanese 
Steamers  Subsidized  —  Second  Visit  to  Chinkiang  —  Interview  with 
Admiral  of  Yangtse Page  I20 


Interview  with  General  Li,  who  was  Unhappy  About  China*s  Future — He 
was  Afraid  Russia  would  Prevent  England  from  Assisting  China. .  138 


Found  the  British  Community  Very  Anxious  as  to  Future  Security,  Ow- 
ing to  Rebellions  Such  as  Yu  Man  Tsup — Origin  of  Rebellion,  which 
has  Lasted  Twelve  Years— Merchants*  Resolution — Weakness  of  Local 
Officials — Incendiarism  Rife — Importance  of  Opening  up  Waterways — 
New  Navigation  Law's  Defects — French  and  Russian  Seizures  of  Brit- 
ish -  owned  Property  at  Hankow,  which  was  Registered  at  Consulate, 
but  French  Tore  up  Boundary  Stones — British  Firms  Published  Pro- 
tests, but  French  Consul  Absolutely  Sold  Land — Russian  Armed  Inter- 
ference with  British  on  Land  Bought  in  1862 — Consul  Feared  British 
Firm  would  not  be  Supported  by  H.M.'s  Government — Cases  Should 
be  Inquired  Into — Hankow  Land  Certain  to  Increase  in  Value — To 
Exact  Compensation  from  China — Cowardly  as  She  is  Powerless — Vice- 
roys would  be  Glad  to  See  Gunboats  on  Yangtse — Rapids  no  Difficulty 
— Steamers  on  Yangtse  —  Nationality  and  Numbers  —  Coal  -  fields  and 
Iron-mines  in  Hupeh — Visit  to  I^atter  at  Wong  Chi  Tong — Tea  Busi- 
ness at  Hankow  Declining  —  Freight  Principally  British  —  Summary 
of  Interviews  with  Chung  Chi  Tung,  the  Viceroy — He  was  Afraid  of 
Disturbances,  as  He  had  not  Enough  Troops  to  Quell  Them — His  Ex- 
cellency Suggested  Employment  of  American  and  Japanese  Officers 
for  Army  Reorganization,  but  Saw  Insuperable  Obstacles  to  his  Or- 
ders, as  to  Drilling  Two  Thousand  Men,  Especially  on  Financial 
Grounds — At  a  Second  Interview  the  Viceroy  Raised  Fewer  Difficulties 
— Visit  to  His  Excellency  Sheng,  Who  Thought  Russia  Too  Strong, 
and  China  Might  Have  to  Throw  in  her  Lot  with  Russia  —  Visit  to 
the  Iron  and  Steel  Works  at  Hanyang — The  Rich  Province  of  Hunan 
Most  Anti-foreign  in  China — Gold-mines  with  Modem  Machinery  in 
Hunan — Accounts  of  Various  Foreign  Factories  Started  in  Hankow — 
Hankow  the  Chicago  of  China  in  the  near  Future 139 


Arrival  at  Foochow  —  British  Merchants*  Complaints  of  Likin  —  British 
Capital  could  be  Profitably  Employed  Here — State  of  the  Min  River 
— Trouble  with  the  Chinese  Officials — Friction  as  to  What  Constitutes 
the  Area  Free  from  Likin  —  Interview  with  the  Viceroy  HsU  Jung 
Kwei — His  Views  on  the  Provincial  Armies  System — ^Visit  to  the  Tar- 
tar General  Tseng  Chee — Finances  of  Fuhkien  Province— Difficulty  in 
Paying  Wages  at  Arsenal 169 




Arrival  at  Swatow— Resolution  of  British  Merchants — Officials  Afraid  of 
the  People — Province  Decimated  in  1872 — Opposition  of  Natives  to 
Machinery — British  versus  American  Goods  —  Restrictions  Fatal  to 
Trade — Vide  a  Railway  Proposed  Here — No  Chance  at  Present  for 
Development  of  Trade Page  177 


Arrival  at  Amoy— Tea  Trade  Nearly  Extinct  Here — Suggestions  of  Cham- 
ber of  Commerce  for  Improving  Tea  Trade — Imposition  of  Likin  Ac- 
counts for  General  Decline  in  Trade — Cases  Given  me  of  Flour,  Brick- 
making,  and  Other  Trades  Killed  by  Likin — Salt  Monopoly  Abuses — 
Causes  of  Famine  in  China  Examined  :  Proved  to  be  Due  to  Grain  not 
Being  Allowed  to  be  Moved — Captain  Fleming*s  Report  on  Coal  Area 
of  Kwangtung  —  Emigration  to  Singapore  —  Respect  of  Chinese  for 
Queen  Victoria 182 


Arrival  at  Hong  Kong  and  Interview  with  Reformer  Kang  Yu  Wei — 
The  Reform  Party  Crushed,  but  not  Killed,  in  China — They  Favor 
Extension  of  Western  Trade  with  China — Reformers  not  Practical 
Enough:  Theoretically  Sound  in  Views — Opinions  of  Chinese  Com- 
pradors and  British  Merchants  —  Disturbances  Great  Drawback  to 
Trade — France  in  the  South — Trade  of  Hong  Kong  with  Kwangsi 
and  Kwangtung:  Tables,  Ditto — Chinese  Custom  House  in  a  British 
Colony  an  Anomaly — Its  Effect  on  the  Junk  Trade — Blockade  of  Hong 
Kong — The  Opium  Trade  at  Hong  Kong — Particulars  and  Figures — 
SjTstem  not  Fair  to  Chinese  Government — Memorandum  Showing  Cus- 
toms Views  on  Question  of  Custom  House — Resolutions  of  Chamber 
of  Commerce,  Hong  Kong,  on  this  Subject — Views  of  the  Chamber 
on  the  '•  Open  Door"  Principle — Address  from  the  Chinese  Residents 
at  Hong  Kong — Humiliating  Regulations  of  British  Government — 
Their  Views  on  Reform 191 


Arrival  at  Canton  —  Presented  with  Memorandum  by  Merchants  — 
Definition  of  the  Area  of  the  Treaty  Port  Wanted  —  Transit  Passes 
and  Piracy  on  the  West  River — French  Claims  to  Sphere  of  Influence 
Unjustified  by  Amount  of  their  Trade — Reply  to  British  Merchants* 
Memorandum — Copies  of  Documents  Showing  Correspondence  be- 
tween British  Minister,  Consul,  and  Chinese  Authorities  re  the  Area 
of  the  Port  Exempted  from  Likin — Piracies  on  the  West  River— -Ac- 
count of  Tung  Kong  Case — British  Launch  Boarded,  and  then  Com- 
pelled to  Tow  Pirates — Scarcely  a  Day  but  Flagrant  Cases  Occur  which 
Impede  Trade — Forty-one  Cases  of  Piracy  Reported  by  Local  Press— 

•  •  • 



Officials  Should  be  Made  Pecuniarily  Liable  for  Losses — Extraordinary 
Story  of  Piracy  on  a  Hong  Kong  Junk :  Two  Hundred  Dollars  Dam- 
age Done,  and  People  Thrown  into  River — Statement  of  Police  as  to 
Condition  of  Junk  After  Fight  —  Case  of  Piracy  on  the  Chung  On  : 
Captain  Shot  and  Mutilated  After  Death  by  the  Pirates — Comparison 
of  English,  German,  and  French  Trade  in  Kwangtung  and  Kwangd — 
French  Sphere  of  Influence  would  be  Detrimental  to  British  Trade — 
Interview  with  His  Excellency  Kwei  Yun — Mineral  Resources  of 
Province — Effect  of  Disturbances  on  the  Integrity  of  Chinese  Em- 
pire   Page  232 


No  Time  to  Visit  Wuchow,  but  Mr.  Hosie  (Consul)  Came  Down  to  Can- 
ton— New  Navigation  Laws  Imperfect — Suggestions  for  a  Railway — 
Chinese  Guards  of  British  Consul  had  One  Rifle  Between  Them..  264 


Chinese  Armies  and  Navies:  Full  Account  of  Each  Visited — Reported 
Position  of  Russian  Troops  in  Eastern  Siberia  and  Manchuria....  267 

Forts  and  Arsenals — Full  Reports  of  Visits  to  All  but  One 290 


Wide  Difference  between  Built,  Building,  and  Projected  —  Account  of 
those  Built — ^Account  of  Railways  Building,  with  Nationality,  etc. — 
Account  of  Railways  Projected  or  Suggested  in  China — Particulars  of 
Kind  of  Railways  Required  in  China  —  We  may  have  to  Concede 
Spheres  of  Railway  Interest 304 


Antiquity  and  Convenience  of  Waterways,  but  Peculations  of  Officials  Ren- 
der Useless — The  Yangtse  River,  3500  Miles  Long :  Rapids  First  Navi- 
gated by  Mr.  Little — Account  of  Distances  and  Condition  of  River 
from  Hankow  to  Ichang — Gorges  of  Yangtse  neither  so  Difficult  nor 
Dangerous  as  Supposed — Steamers  Required  to  Navigate  Them — Rise 
and  Fall  of  River— British  Civil  Engineers  Wanted — Probable  Cost  of 
Improving  Rapids — French  Claims  to  Sphere  of  Influence  in  Yangtse 
Valley — H.M.S.  Woodcock^  Shallow- draught  Gunboat  on  Yangtse — 
Steamers  Badly  Wanted  for  Towing — Account  of  Grand  Canal: 
Showing  its  Condition,  and  how  it  would  Add  to  Trade  of  Chinkiang 
— Account  of  West  River  Trade — How  French  Claim  would  Interfere 
with  it— Routes  Taken  to  Avoid  Likin  via  Pakhoi  Instead  of  Hong 
Kong — ^Junks  Flying  no  Flag  Nominally  Owned  by  British — Leads  to 
Evasion  of  Likin — Unfair  to  Chinese  Customs — Differential  Treatment 



and  Restrictions  on  West  River  —  British  Ship-owner  has  Direct  In- 
terest in  Goods  to  Destination,  Merchant  has  not — Necessity  for  Secur- 
ing Equality  of  Treatment  for  all  Goods — Yellow  River :  Account  of 
its  Changes  of  Bed — Cause  of  These  Inundations,  and  Damage  They 
Do — Navigation  Difficult,  Owing  to  Lowness  of  Water  and  Swiftness 
of  Current — The  Wangpoo  River — Way  in  which  the  Woosung  Bar 
Affects  Shanghai  —  Pei  Ho  River :  Difficulties  of  Navigation,  Cause, 
and  Proposed  Remedy — Liao  River  Closed  by  Ice  in  Winter — Ship- 
ping at  Time  of  Visit — The  Han  River — Account  of  the  Big  "  Bore" 
— Smaller  Rivers  Silting  Up— Dredges  Necessary — Gold  in  Rivers — 
Tung  Ting  Lake  and  Siang  River — Poyang  Lake — Roads  in  China — 
Suggestions  for  Reform — Lighting  of  Peking Page  318 


Merchants  Too  Hard  on  Consuls — Defects  in  System,  not  in  Men — Com- 
plaints of  Merchants  Tabulated — Consuls  Themselves  Admit  Defects — 
Some  Duties  of  British  Consuls  Specified,  Showing  Nature — A  Com- 
mercial Attache  Wanted — Present  Appointment  a  Farce — Training  of 
Consuls  Deficient,  and  does  not  Make  Them  Business-like — Foreign 
Nations  Give  Their  Nationals  Better  Consular  Support — British 
Government  Must  Move  with  the  Times  and  Assist  Merchants — British 
Subjects  Better  Recommended  by  American  than  by  their  Own  Consul 
— Charge  for  British  Transit  Passes  Places  Merchant  at  Disadvan- 
tage— Remedies  Suggested:  More  Men,  Better  Pay,  Earlier  Retire- 
ment   348 


Recognizing  Difficulty  of  Subject :  Made  a  Collection  of  Currency — List  of 
Coins,  Etc.,  in  the  Collection — Weak  Financial  Position  of  China  Due 
to  Military  Weakness — Revenue  Squandered  in  Expenses  of  Collection 
— List  of  Loans  —  Guarantees  on  Railway  Loans  Bound  to  Hamper 
China  Later — Why  the  Mandarins  Misappropriate  Revenue — Days  for 
Loans  Gone — Guides  to  Investors  in  this  Country — Proposal  for  In- 
creasing Revenue — How  Spheres  of  Influence  would  Affect  Foreign 
Bondholders — No  Security  Without  Adequate  Military  and  Police  Pro- 
tection— The  Value  of  the  Different  Taels  in  China — Dollars  Used — 
Subsidiary  Coinage  and  Copper  Cash  —  Paper  on  Relation  Between 
Copper  Cash  and  Silver  —  Memorandum  on  Chinese  Copper  Cash  — 
Reply  to  Two  Questions  as  to  Gold  Standard:  Is  it  Possible?  and 
How  has  Rate  of  Exchange  Affected  Price  of  Commodities  ?  —  Re- 
forms Suggested  to  Improve  Finance  and  Currency — List  of  Banks  in 
China 359 


Changed  Conditions  and  Competition  Telling  on  British  Trade  —  New 
Markets  Opening — Machinery  Especially  Required — Unpublished  Re- 


turns  of  1898  Trade  Showing  Net  Decrease — Export  Trade  has  Suf- 
fered from  Disturbances,  etc. — Railways  will  Help  British  Trade  if 
Chinese  Integrity  is  Maintained — Customs  Duties :  Request  for  Increase 
— British  Treaties:  Nanking  Treaty,  Tientsin  Treaty  of  1858,  Prin- 
cipal Articles  and  Intentions — Sir  Rutherford  Alcock's  Unratified  Con- 
vention of  1868 — Sir  Robert  Hart's  View  of  Alcock  Convention — Che- 
foo  Convention  .  Principal  Articles  and  Intentions  of  Framers — Article 
VII.  of  Customs — Tariff  Opposed  to  Treaty — New  Customs  Rules  as 
to  Transit  Passes — Information  not  New,  but  is  a  Useful  Short  Sum- 
mary— Illegal  Taxes:  Names  and  Descriptions — Dual  Customs  Con- 
trol (Imperial  and  Provincial)  Hinders  Trade — Difficulties  of  Transit 
Pass  System  Explained  —  Merchants*  Suggestions  to  Remedy  Abuses 
— French  Firm  Action  has  Benefited  British  Trade — Salt  Monopoly 
and  Land-tax  Abuses — The  Chinese  Side  of  the  Questions  Presented — 
Revision  of  Tariff:  Increase  Merchants  will  Consent  to  — Reforms 
Asked  as  a  quid  pro  quo — How  Treaty  Revisions  can  be  Carried  Out 
Fairly  —  The  Marquis  Ito's  and  the  Merchants'  Suggestions  —  Future 
Trade  Prospects  —  Japan  and  China  Compared  —  Summary  of  Points 
and  Necessities  of  Situation Page  389 


Invitations  to  Visit  Japan — Arrival  at  Nagasaki — Machinery  the  Trade 
Most  Likely  to  be  Developed  with  Us — Arrived  at  Kobe  and  Osaka — 
Visit  to  Arsenal  and  Factories — Iron  and  Steel  Works,  Metal  Fac- 
tories, etc. — Meeting  of  Merchants — Electric  Plant  at  Kioto  which 
Hauls  Boats  Overland — No  Country  which  Uses  Electricity  to  Such 
Advantage — Arrival  at  Tokio — Views  of  Japanese  on  **Open  Door'* 
Policy — Japanese  Think  Chinese  would  Make  Good  Soldiers — ^Visits 
to  Military  and  Naval  Schools,  and  Parade  of  Troops — Address  to  Jap- 
anese Chamber  of  Commerce  —  Interview  with  Emperor  of  Japan — 
Visits  Paid  to  Dockyard  and  Fleet — Japan  Must  Have  an  Export 
Trade — China  Market  Nearest 419 


Arrival  at  San  Francisco  —  Visit  to  Ship-building  Works  —  Address  to 
Chamber  of  Commerce  at  San  Francisco^Chicagor  Visit  to  Public 
Institutions,  and  Speeches  Made — Buffalo — Account  of  Niagara  Elec- 
tric Works — Visit  to  Washington — Mr.  Whitelaw  Reid  on  Philippine 
Policy — Arrival  at  New  York :  Address  to  Chamber  of  Commerce — 
Interest  Taken  in  the  Mission  in  America — Policy  of  **  Ojjen  Door  " 
Supported  in  the  States — Question  of  British  Ownership  of  American 
Goods — Friendship  to  Great  Britain — American  Trade  with  China 
More  Important  than  Apparent — Interests  of  Great  Britain  and  Ameri- 
ca Identical , 43^ 




Review  of  Report — Points  out  Difficulties  and  Dangers  of  Sphere  of  In- 
fluence Policy,  and  Offers  Suggestions  for  Reforms  to  Remedy  Present 
State  of  Affairs Page  448 


Letter  Authorizing  Mission,  and  Resolutions  of  Chamber  of  Commerce 
and  Other  Bodies  in  China — Summary  of  Trade  Statistics  in  China.  459 

INDEX 485 





The  estimated  population  is  1,300,000 

I  ARRIVED  in  Peking  on  October  the  i6th,  1898. 
Having  heard  that  there  was  some  misunderstand- 
ing as  to  my  status,  it  having  been  asserted  that  I 
was  an  emissary  from  the  British  Government,  I 
paid  my  respects  to  all  the  foreign  Ministers  ac- 
credited to  Peking,  and  explained  clearly  to  their 
Excellencies  what  position  I  held.  I  spoke  of 
the  reference  given  to  me  by  the  President  of  the 
Associated  Chambers  of  Commerce,  Sir  Stafford 
Northcote,  which  showed  that  I  had  been  asked 
to  come  out  to  make  a  report  on  British  trade 
and  commerce,  its  future  development,  and  what 
security  existed  throughout  the  Empire  for  such 
trade  and  commerce. 

During  my  visit  to  M.  Pavlofif,  the  Russian 
Charg€  d' Affairs,  he  told  me  that  he  would  be 
delighted  if  I  could  find  time  to  visit  Port  Arthur. 
He  also  declared  his  regret  that,  whereas  nearly  all 


nations  had  sent  officers  to  look  at  Port  Arthur 
since  the  Russians  had  occupied  it,  Great  Britain 
had  not  proposed  to  do  so. 


On  October  20th  I  visited  the  Tsung-h*  Yamen 
by  appointment.  I  was  received  at  the  entrance 
with  great  courtesy  and  ceremony  by  the  mem- 
bers, and  conducted  to  the  audience-hall,  where  I 
was  presented  to  Prince  Ching,  the  President  of 
the  Tsung-li  Yamen.  The  whole  of  the  mem- 
bers were  present,  which,  I  was  informed,  was  un- 
usual. After  the  customary  Oriental  formalities 
and  compliments,  I  informed  their  Excellencies 
that  I  was  in  no  sense  whatever  an  official  repre- 
sentative of  the  British  Government,  but  that  I 
had  been  deputed  by  the  Associated  Chambers  of 
Commerce  of  Great  Britain  to  proceed  to  China 
to  report  upon  the  condition  of  British  trading 

His  Highness,  and  other  members  of  the  Tsung- 
li  Yamen,  spoke  of  Great  Britain  in  very  friendly 
terms.  They  said  they  were  aware  that  Great 
Britain's  principal  interest  was  trade,  and  that  she 
and  China  had  for  many  years  conducted  trade  to 
mutual  advantage. 

I  informed  them  that  those  connected  with  the 
China  trade  at  home  were  anxious  to  develop  this 
trade  between  Great  Britian  and  China,  but  that 
there  was  great  anxiety  as  to  the  future,  principally 


on  account  of  the  want  of  security  for  capital  and 
vested  interests. 

The  commercial  classes  were  also  much  exercised 
in  their  mind  at  the  manner  in  which  the  Chinese 
have  ignored  treaties,  the  main  object  of  which  was 
the  protection  and  furtherance  of  trade  and  com- 

I  pointed  out  to  their  Excellencies  that  unless 
China  herself  took  in  hand  the  organization  of  a 
military  and  police  force  in  order  to  give  that 
security  for  trade  and  commerce  which  the  great 
trading  nations  had  a  right  to  demand,  circum- 
stances were  certain  to  be  produced  which  would 
inevitably  lead  to  foreign  countries  adopting  a 
policy  embodied  in  the  expression  "  Spheres  of  In- 
fluence," in  order  that  their  trade  and  commerce 
might  be  preserved  and  adequately  protected.  I 
further  pointed  out  that  the  last  thing  that  the 
British  commercial  communities,  and  indeed  the 
whole  British  people,  desired  was  any  addition 
being  made  to  the  British  Empire,  either  in  the 
nature  of  dominion,  sphere  of  influence,  or  protec- 
torate. That  which  the  commercial  communities 
earnestly  desired  was  free  and  uninterrupted  op- 
portunities for  trade,  not  selfishly  for  the  British 
nation  alone,  but  with  equal  rights  and  privileges 
for  all  the  nations  of  the  world;  in  other  words, 
what  is  described  as  the  "Open  Door"  for  the 
trade  of  all. 

In  order  that  this  should  be  effective  and  as- 
sured, I  submitted  to  their  Excellencies  that  it  was 



essential  that  China^hould  maintain  her  integrity. 
I  further  added  that  if,  owing  to  the  break-up  of 
China  and  the  necessity  of  protecting  foreign  trade, 
European  countries  were  forced  to  adopt  the  pol- 
icy of  "Spheres  of  Influence,"  it  might  possibly 
cause  considerable  irritation  and  unwished-for  com- 
plications between  those  countries,  but  it  most 
certainly  would  bring  about  the  fall  of  the  Chinese 

Prince  Ching  remarked  that  the  members  of 
the  Tsung-li  Yamen  quite  appreciated  all  I  had 
said,  but  asked  me  how  I  thought  trade  and  com- 
merce could  be  better  protected  than  it  was  at 

I  informed  the  prince  that  real  and  effective 
protection  could  be  given  to  property  by  a  thor- 
ough and  complete  reorganization  of  the  Chinese 
Army  as  a  whole;  that  the  present  system  of  having 
provincial  armies  had  proved  itself,  over  and  over 
again,  ineffective;  that  a  vast  amount  of  property 
had  been  destroyed,  and  that  many  lives,  of  mis- 
sionaries and  others,  had  been  sacrificed,  all  owing 
to  the  want  of  efficient  military  and  police;  that 
these  losses  of  life  and  property  had  caused  im- 
mense inconvenience  and  expense  to  the  Chinese 
Government  itself ;  that  if  a  tenth  part  of  the  sum 
that  the  Chinese  have  had  to  pay  as  indemnity  for 
the  loss  of  life  and  property  had  been  devoted  to 
military  organization,  such  losses  would  not  have 
taken  place. 

I  also  pointed  out  that  even  if  the  sum  supposed 



to  be  devoted  for  military  purposes  in  the  prov- 
inces were  expended  as  intended,  China  would 
have  an  army  of  from  two  to  three  hundred  thou- 
sand men,  without  a  penny  of  extra  taxation  be- 
ing placed  upon  the  people. 

Prince  Ching  replied  that  he  did  not  think  it 
would  be  possible  to  alter  the  old-established  cus- 
tom and  practice  of  having  provincial  armies  to 
maintain  order  in  China.  I  remarked  that  the 
Chinese  Government  had  lately  had  a  very  excel- 
lent illustration  of  the  result  of  the  provincial  sys- 
tem when  carried  out  with  regard  to  the  fleet.  If 
the  two  fleets — ^the  Peyang  fleet  and  the  Nanyang 
fleet — had  been  a  national  fleet  under  one  com- 
mander and  organization,  it  would  have  been  im- 
possible for  the  Japanese  to  have  obtained  the 
brilliant  and  easy  victories  which  they  achieved  in 
the  late  war,  and  China  would  not  now  be  in  the 
deplorable  position,  politically  and  financially,  in 
which  she  finds  herself  at  present. 

Their  Excellencies  commenced  discussing  this 
point  among  themselves,  and  I  was  informed  that 
some  of  them  entirely  agreed  on  this  point. 

I  then  suggested  that  as  Great  Britain  had  64 
per  cent,  of  the  whole  foreign  trade  of  China,  she 
was  naturally  anxious  as  to  its  adequate  security, 
and,  being  on  very  friendly  terms  with  the  Chinese, 
it  might  be  possible  that  the  British  Government 
would  allow  an  officer  to  help  the  Chinese  to  put 
their  army  in  order,  if  the  Chinese  Government 
applied  to  the  British  Government  for  assistance 



of  this  description.  I  further  said  that  I  had  no 
authority  whatever  to  make  this  statement,  but  in 
the  interests  of  British  trade  and  commerce,  as 
well  as  on  account  of  the  friendly  feelings  that  I 
had  towards  China,  I  made  it  as  a  suggestion,  in 
order  that  something  practical  might  be  proposed 
to  remedy  the  present  unsatisfactory  state  of 

I  reminded  the  Prince  that  the  Chinese  Govern- 
ment had  already  had  extensive  experience  of  the 
loyalty  and  utility  of  British  subjects  when  employ- 
ed as  Chinese  servants,  and  referred  to  General 
Gordon,  who  had  been  the  means  of  keeping  the 
present  dynasty  on  the  throne ;  and  to  Sir  Robert 
Hart,  who,  by  his  able  and  excellent  administra- 
tion over  the  maritime  customs,  had  produced  the 
only  certain  available  asset  they  possessed  in  the 
whole  Empire. 

Several  of  the  Ministers  present  here  said  that, 
though  there  might  be  difficulties,  they  agreed 
with  my  remarks.  They  also  spent  some  little 
time  in  strong  eulogies  of  General  Gordon  and 
Sir  Robert  Hart.  I  may  mention,  as  an  interest- 
ing fact,  that  during  the  many  interviews  and  con- 
versations which  I  had  with  Viceroys  and  other 
high  Mandarins,  they  invariably  asked  me  if  I 
knew  what  Sir  Robert  Hart's  opinion  was  on  the 
question  which  we  were  discussing.  This  com- 
plete confidence  in  Sir  Robert  will  naturally  ex- 
cite feelings  of  pride  and  satisfaction  among  his 

countrymen  at  home. 



I  further  remarked  that,  in  the  event  of  the 
Chinese  Government  contemplating  such  an  idea, 
it  might  be  well  to  invite  those  nations  who  had 
large  trading  interests  with  China  to  lend  a  few 
officers  and  non-commissioned  officers  to  work 
with  the  British  in  the  reorganization  of  the  army. 

The  Prince  said  that  they  had  already  had  Ger^ 
man  officers  to  drill  some  of  their  troops,  and  also 
Captain  Lang,  a  British  naval  captain,  to  organize 
their  fleet.  In  both  cases  the  work  had  been  done 
to  the  entire  satisfaction  of  the  Chinese  Govern- 

Prince  Ching  repeated  that  the  Tsung-li  Yamen 
thought  my  remarks  very  sound,  and  that  they 
would  like  to  see  me  again  in  a  few  days,  when 
they  had  had  time  to  think  over  my  suggestions. 
He  said  the  Tsung-li  Yamen  were  satisfied  with 
the  integrity  of  Britain's  motive,  that  they  knew 
she  did  not  want  territory,  but  would  do  all  in  her 
power  to  promote  trade. 

The  interview,  which  had  lasted  three  hours, 
then  closed  with  the  usual  Eastern  compliments 
and  ceremony. 

On  October  2  2d,  Prince  Ching  and  some  mem- 
bers of  the  Tsung-li  Yamen  paid  me  the  compli- 
ment of  visiting  me  at  the  British  Legation. 

Prince  Ching  immediately  referred  to  the  pre- 
vious interview,  and  said  that  they  had  seen  the 
Emperor  and  the  Empress  Dowager,  who  con- 
sidered that  the  suggestion  I  had  made  appeared 
to  be  good,  and  that  they  recognized  it  was  in  the 



interests  of  China  to  offer  proper  protection  for 
trade  and  commerce. 

They  informed  me  that  a  special  edict  had  been 
issued  on  the  previous  day  to  his  Excellency 
Chung  Chi  Tung,  the  Viceroy  of  Hunan  and 
Hupeh,  ordering  him  to  have  2cxx>  of  his  troops 
in  readiness,  in  order  that  they  should  be  put 
under  a  British  officer  for  drill  and  organization 
as  a  trial.  A  thousand  of  these  troops  were  to  be 
Chinese,  and  were  under  the  immediate  command 
of  his  Excellency  Chung  Chi  Tung,  and  the  other 
locx)  were  to  be  Manchus,  who  were  under  the 
command  of  the  Tartar  General  Hsiang  Hing,  at 
Ching  Chou. 

Prince  Ching  said  that  the  drilling  of  the  2000 
troops  would  be  tried  as  an  experiment,  and  that, 
if  successful,  it  might  lead  to  the  organization  of 
the  army  as  a  whole.  I  pointed  out  to  the  Prince 
that  I  was  in  no  way  authorized  to  take  any  re- 
sponsibility with  regard  to  this  matter,  that  I  had 
only  made  a  suggestion  in  the  interests  of  the  pro- 
tection of  trade,  and  that  any  action  taken  on  the 
part  of  the  Tsung-li  Yamen  must  go  through  the 
proper  channel — i.e.,  through  the  British  Minister 
to  the  British  Government. 

Prince  Ching  said  it  was  the  intention  of  the 
Tsung-li  Yamen  to  at  once  inform  Sir  Claude 
MacDonald,  the  British  Minister,  of  their  wishes, 
as  well  as  the  fact  of  the  edict  having  been  sent 
to  his  Excellency  Chung  Chi  Tung,  and  also  to 
telegraph  to  his  Excellency  Lo  Fen  Lu,  the  Chi- 



nese  Ambassador  in  London,  a  similar  communi- 

Prince  Ching  said  they  would  telegraph  to 
Chung  Chi  Tung  that  I  was  shortly  going  to  visit 
the  Yangtse,  and  ordering  him  to  confer  with  me 
on  the  matter. 

I  remarked  that  I  would  be  delighted  to  confer 
with  the  Viceroy,  but  that  the  matter  must  be  one 
to  be  settled  between  the  two  governments,  and 
that  I  had  no  right  or  authority  whatever  to  med- 
dle with  the  matter. 

The  interview  ended  in  an  expression  of  thanks 
from  Prince  Ching,  in  which  he  declared  that  the 
Tsung-li  Yamen  looked  upon  me  as  the  friend  of 

Since  leaving  Peking  I  have  been  in  communi- 
cation with  Prince  Ching,  and  have  received  letters 
from  him. 

The  gentleman  who  was  good  enough  to  inter- 
pret for  me  at  both  these  interviews  was  Mr.  Ful- 
ford,  of  the  British  Legation,  who  helped  me  to 
impress  on  the  Tsung-li  Yamen  that  my  remarks 
had  reference  only  to  questions  connected  with 
commerce,  and  that  there  was  nothing  of  a  political 
character  in  any  of  the  suggestions  that  I  made. 

It  was  wise  to  employ  the  interpreter  to  the 
British  Legation,  for  in  the  East  verbal  communi- 
cations are  continually  the  cause  of  grave  misun- 
derstandings. By  taking  this  precaution  all  that 
passed  between  myself  and  the  high  officials  in 
Peking  was  made  known  to  the  British  Minister. 



While  at  Peking  I  paid  a  visit  to  his  Excellency 
Yung  Lu,  at  present  one  of  the  most  powerful  and 
influential  men  in  the  Chinese  Empire. 

He  conferred  with  me  relative  to  the  interviews 
I  had  had  with  the  Tsung-li  Yamen.  He  said  the 
principle  of  reorganizing  the  Chinese  Army  under 
British  and  foreign  officers  and  non-commissioned 
officers  was  going  to  be  adopted,  and  that  an  edict 
had  already  been  sent  to  his  Excellency  Chung 
Chi  Tung.  His  Excellency  Yung  Lu  was  most 
anxious  that  I  should  give  him  details  as  to  how 
the  principle  should  be  carried  out.  This  I  con- 
sented to  do,  after  impressing  upon  him  that  what 
I  said  was  my  own  private  opinion,  and  that  all 
the  details  connected  with  such  a  scheme  must  be 
discussed  by  the  two  governments,  and  not  by 
private  individuals. 

I  explained  to  his  Excellency  that  naturally 
Great  Britain  would  be  anxious  to  help  China,  not 
so  much  for  the  sake  of  China  herself  as  for  the 
sake  of  British  interests  with  regard  to  the  further- 
ance of  trade. 

His  Excellency  asked  me  a  direct  question — 
whether  if  China  put  the  whole  of  her  armies 
under  British  officers,  Great  Britain  would  assist 
China  in  any  quarrel  that  might  arise  between  her 
and  any  other  Power. 

I  remarked  that  I  would  not  enter  into  any 
political  questions,  but  that  the  last  thing  Great 



Pritain  wanted  to  do  was  to  mix  herself  up  in 
quarrels  which  might  arise  between  other  coun- 
tries. I  asked  his  Excellency  if  I  might  see  the 
military  forces  at  present  quartered  around  Peking. 
His  Excellency  replied  that  he  would  be  very  glad 
if  I  would  visit  those  armies  which  were  properly 
drilled  and  effective,  but  that  it  would  be  no  use 
my  seeing  the  two  armies  that  were  composed  of 
coolies,  and  were  not  smart  or  properly  drilled. 
An  account  of  the  armies  I  saw  will  be  found  in 
another  chapter. 

Before  leaving,  his  Excellency  pressed  me  to 
remain  longer  in  Peking,  and  to  see  Prince  Ching 
and  the  Tsung-li  Yamen  again,  with  the  object  of 
going  further  into  details  connected  with  the  or- 
ganization of  the  Chinese  Army.  I  remarked  that 
that  was  impossible,  and  that  if  the  Tsung-li  Ya- 
men thought  seriously  of  the  matter,  their  proper 
course  was  not  to  discuss  it  with  me  but  with  the 
British  Minister. 

I  also  called  upon  his  Excellency  Hu  Yen  Mei, 
Director  of  Railways  and  Governor  of  Peking,  a 
most  energetic  and  enlightened  Mandarin.  He 
professed  himself  very  friendly  to  the  British,  and. 
said  that  when  China  was  opened  up  by  railways 
it  would  surely  make  for  the  benefit  of  China  and 
the  trade  of  all  nations.  He,  however,  was  very 
anxious  as  to  the  immediate  future  of  his  country, 
and  said  that  he  earnestly  hoped  the  Chinese  Gov- 
ernment would  shortly  create  an  efficient  army,  as 

if  disturbances  occurred  European  countries  would 



be  very  likely  to  take  large  slices  of  territory  as 
compensation  for  life  or  losses,  which  China  in  her 
present  position  was  powerless  to  prevent 

His  anxiety  was  based  greatly  on  what  had 
occurred  while  I  was  there.  Two  of  the  British 
engineers,  making  the  line  near  Fungti,  had  been 
badly  beaten  and  shot  at  by  some  of  the  Kansu 

While  at  Peking  I  paid  a  visit  to  his  Excellency 
Li  Hung  Chang.  I  found  him  very  old  and  in- 
firm. The  conversation  was  of  no  interest  to 
this  Report. 

I  called  upon  Sir  Robert  Hart,  the  Inspector- 
General  of  Customs,  and  upon  Mr.  Bredon,  the 
Deputy  Inspector-General,  and  had  some  conver- 
sation  with  them  relative  to  the  Customs  adminis- 
tration at  Hong  Kong. 

The  subject  matter  of  this  interview  will  be 
found  under  the  chapter  of  this  Report  headed 
"  Hong  Kong." 

Sir  Robert  Hart  expressed  an  opinion  that  it 
would  be  for  the  benefit  of  trade  and  commerce, 
as  well  as  of  China  herself,  if  she  would  create  an 
effective  military  force  for  the  protection  of  her 
trading  interests. 

From  my  conversation  with  Chinese  authorities, 
foreigners  as  well  as  British  in  Peking,  an  opinion 
was  distinctly  formed  in  my  mind  that  British 
prestige  is  certainly  below  that  of  Russia.  I  hardly 
ever  made  a  suggestion  to  any  prominent  Chinese 
official  which  I  thought  might  tend  to  the  security 



of  Anglo-Saxon  trade  and  commerce,  that  I  was 
not  met  with  the  question, "  But  what  would  Russia 
say  to  that  ?"  or  words  to  that  effect. 

The  idea  is  gaining  ground  all  over  China  that 
Great  Britain  is  afraid  of  Russia.  Whenever  I 
expressed  astonishment  at  such  a  thought  being 
entertained,  the  individual  or  individuals  to  whom 
I  was  speaking  referred  to  some  of  the  following 
recent  events — ^viz.,  Great  Britain  being  afraid  to 
support  Japan  when  Japan  was  ordered  out  of 
Corea  and  the  Shantung  Peninsula;  the  objec- 
tions which  prevailed  against  Great  Britain  ad- 
vancing the  loan  to  China;  the  Talienwan  and 
Port  Arthur  incidents,  and  the  Shanhaikwan  Rail- 
way incident. 

A  prominent  bank  official  summed  up  the  situa- 
tion very  tersely  by  saying,  "  sixty-four  per  cent 
of  the  whole  foreign  trade  with  China  is  British. 
There  should  be  a  corresponding  percentage  of 
influence,  but  British  influence  is  in  inverse  ratio 
to  British  trade." 



The  estimated  population  is  i,ooo,ooo- 


The  total  value  of  trade  in  1897  was  Hk.  taels  551059,017 
(nearly  j^8,ooo,ooo). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  1,326,663,  of  which  574,177  was  British. 

I  ARRIVED  at  Tientsin  on  the  15th  of  October, 
1898.  Soon  after  my  arrival  I  attended  a  meet- 
ing of  the  Chamber  of  Commerce.  The  chairman, 
Mr.  W.  W.  Dickinson,  a  British  merchant,  opened 
the  proceedings  by  expressing  thanks  on  behalf 
of  his  Chamber  to  the  Associated  Chambers  of 
Commerce  in  London,  for  having  sent  a  mission 
out  to  China  to  inquire  into  the  state  of  trade. 

This  Chamber  vehemently  protested  against 
what  is  described  as  a  Sphere-of- Influence  policy, 
and  declared  that  the  future  trade  of  Tientsin 
would  be  entirely  dependent  upon  preserving  the 
integrity  of  China,  as  well  as  some  guarantee  for 
the  policy  of  the  Open  Door. 

They  pointed  out  also  that  Tientsin  is  a  great 
trading  and  distributing  centre  of   North  China 



and  Manchuria;  it  is  also  the  natural  outlet  for 
the  provinces  of  Chihli,  Shansi,  Kansuh,  part  of 
Honan,  and  Northern  Shantung,  as  well  as  of 
Eastern  and  Western  Mongolia. 


The  Customs  Returns  bear  testimony  to  the 
steadily  increasing  volume  of  trade  at  Tientsin. 

But  these  returns  by  no  means  show  the  full 
amount  of  duty  paid  by  the  trade  of  the  port,  as  a 
very  large  proportion  of  the  import  duty  on  foreign 
goods  is  collected  in  Shanghai,  and  goes  to  swell 
the  returns  there. 

The  amount  of  duty  collected  in  Tientsin  in 
1888  was  591,494  taels,  about  ;^84,499;  in  1897, 
973,000  taels,  about  ;^  139,000;  an  advance  in  nine 
years  of  nearly  65  per  cent. 

The  total  value  of  imports  and  exports  of 
Tientsin  in  1887  was  32,724,499  Haikwan  taels, 
about  ;^4,674,928.  Ten  years  later,  in  1897,  the 
total  value  amounted  to  64,644,21 1  Haikwan  taels, 
about  ;^9,2 32,030,  being  an  increase  of  no  less  than 
99  per  cent. 

This  increase  of  prosperity  has  not  been  ob- 
tained without  great  labor,  severe  losses  to  in- 
dividuals, and  many  disappointments,  suffered  al- 
most entirely  by  the  British  merchants  whose 
energy  opened  up  the  country. 

The  capital  required  has  been  very  large,  and 
has  up  to  the  present  time  been  increasing.     This 



IS  borne  out  by  the  fact  that  though  eighteen  years 
ago  there  was  no  bank  at  Tientsin,  there  are  now 
four  — viz.:  i.  The  Hong  Kong  and  Shanghai 
Banking  Corporation,  established  in  1881  ;  2.  The 
Deutsch  Asiatische  Bank,  established  1890;  3. 
The  Chartered  Bank  of  India,  Australia,  and  Chi- 
na, established  in  1895;  4.  The  Russo  -  Chinese 
Bank,  established  in  1897. 

The  amount  of  capital  employed  by  the  branch- 
es  of  these  four  banks  at  Tientsin  has  been  esti- 
mated at  about  eight  millions  of  taels,  or  about 


A  very  large  proportion  of  cargo  arriving  and 
leaving  this  port  is  carried  in  foreign  vessels,  prin- 
cipally British. 

These  vessels  have  to  be  specially  constructed 
for  this  particular  trade,  owing  to  the  difficulties 
connected  with  the  bar,  which  makes  them  very 
much  more  costly  than  ordinary  coasting  steamers. 


The  British  section  of  the  Chamber  wrote  me 
the  following  memorandum,  which  they  desired  me 
to  transmit  to  the  Associated  Chambers  of  Com- 
merce : 

"  The  British  section  of  this  Chamber  has  care- 
fully followed  the  action  of  her  Majesty's  Govern- 
ment over  matters  afifecting  China  for  some  con- 
siderable time,  and  has  observed  with  constantly 

increasing  anxiety  the  infringements  of  the   in- 



valuable  Treaty  of  Tientsin,  under  which  trade  has 
flourished.  They  consider  the  existing  deplorable 
state  of  affairs  in  North  China  is  very  largely,  if 
not  entirely,  due  to  the  absolute  absence  of  any 
definite  policy,  the  complete  apathy  shown  to,  or 
the  apparently  vague  idea  possessed  of,  the  extent 
of  British  and  other  interests  now  placed  in  jeop- 
ardy. Protected  by  the  Treaty  referred  to,  we  have 
not  hesitated  to  invest  money  in  China;  but  in 
view  of  the  recent  violation  thereof  by  China's 
northern  neighbor,  we  naturally  feel  that  any  fur- 
ther development  is  accompanied  by  undue  risk, 
and  there  remains  a  distinct  feeling  of  unrest  and 
apprehension  regarding  the  safety  of  capital  already 
locked  up." 

These  remarks  appeared  to  me  to  be  of  so  start- 
ling a  character  that  I  asked  for  some  evidence  to 
take  home  to  the  Associated  Chambers. 

Two  leading  British  merchants  both  personally 
told  me  they  had  capital  they  were  anxious  to  in- 
vest in  China,  but  that  they  intended  to  keep  it 
until  they  saw  a  definite  line  of  policy  proclaimed 
at  home.  They  both  declared  that  the  Shan- 
haikwan  Railway  incident  had  practically  shown 
that  the  British  Government  had  admitted  the 
right  of  the  Russian  Government  to  interfere  in 
matters  of  purely  commercial  enterprise.  They 
stated  that  the  incident  had  completely  demoralized 
all  capitalists  in  the  northern  part  of  China. 

These  views  were  supported  by  the  whole  Brit- 
ish community  present. 
B  17 


Again,  the  representatives  of  the  Taku  Tug  and 
Lighter  Company,  whose  property  is  worth  about 
;^  1 40,000,  informed  me  that  though  they  wanted 
to  invest  a  large  amount  of  capital  in  alterations 
and  improvements  in  the  lighter  system,  the  un- 
certainty which  existed  as  to  the  Russian  position 
in  the  North  rendered  it  imprudent  for  them  to 
invest  any  more  capital  for  the  development  of 
their  property. 

Several  British  merchants  told  me  they  would 
not  invest  any  capital  in  the  North,  now  that 
Russia  has  been  allowed  to  secure  positions  which 
place  her  at  the  advantage  of  being  able  at  any 
moment  to  create  circumstances  which  would  de- 
preciate the  value  of  capital  invested. 

They  said  that  events  in  the  North  had  pro- 
duced that  want  of  confidence  which  was  fatal  to 
financial  or  commercial  enterprise  and  the  devel- 
opment of  trade  and  commerce. 

The  merchants  also  expressed  great  fear  as  to 
the  security  of  the  trade  they  already  possess. 
The  reasons  given  for  their  anxiety  were  the  fol- 
lowing : 

The  heavy  trade  in  wool,  skins,  hides,  furs,  and 
bristles,  etc.,  comes  principally  from  Lanchau,  on 
the  borders  of  Tibet  and  Hsi-ning,  farther  north- 
east.  These  goods  come  right  up  the  Yellow 
River,  and  through  two  passes,  Khaupingkhau  and 
Nankhou.  Both  these  are  dominated  from  Pe- 
king.    There  is  no  other  pass  for  hundreds   of 

miles  to  the  south  of  these  two.    The  whole  of 



the  trade  named,  which  now  comes  through  these 
passes  to  Tientsin,  could  be  diverted  to  the  North 
by  any  power  dominant  in  Peking. 

The  merchants  pointed  out  that  building  rail- 
wa)rs  will  often  divert  trade,  but  that  would  be 
gradual,  and  the  British  would  also  be  building 
railways  in  competition;  but  they  look  forward 
with  great  apprehension  to  the  future,  owing  to 
the  dominant  military  position  of  Russia,  which 
in  a  few  years  would  enable  her  suddenly  to  di- 
vert trade. 

The  merchants  impressed  on  me  the  necessity 
of  assisting  the  buying  power  of  the  people  occu- 
pying the  scattered  and  undeveloped  northern  dis- 
tricts, by  giving  facilities  for  the  free  export  of  their 
products.  They  pointed  out  how  easily  a  hostile 
northern  power  might  divert  the  trade  of  these 
districts  from  the  routes  of  egress  already  created 
by  Anglo-Saxon  traders  in  Manchuria. 

With  a  fair  field  and  no  favor,  or  the  Open 
Door,  the  merchants  declare  that  they  were  per- 
fectly prepared  to  face  any  difficulties  which  they 
might  meet  through  the  diversion  of  trade  by  rail- 
way enterprise  or  by  legitimate  competition. 

The  merchants  protested  most  vigorously  against 
their  interests  being  sacrificed,  as  they  would  be 
if  the  Treaty  of  Tientsin  were  disregarded  and  a 
Sphere-of-Influence  policy  adopted  in  its  stead. 

They  explained  that  nearly  the  whole  of  their 
trade  came  from  the  far-oflf  interior,  and  from  the 
Northeast,  and  that  also  in  the  North  and  the 



West  their  energy,  enterprise,  and  capital  had 
made  those  countries  a  valuable  asset;  and  for  the 
trade  of  those  localities  they  had  found  markets 
abroad.  Any  alienation  of  part  of  China  proper, 
or  its  outlying  dependencies,  to  a  Power  likely  to 
erect  Customs  barriers,  or  to  impose  differential 
tariflfs,  would  absolutely  ruin  their  trade ;  and  the 
sources  of  supply  being  curtailed  would  be  acute- 
ly felt  in  many  important  industrial  centres  of 
Great  Britain,  the  United  States,  Germany,  and 

They  declared  that  with  an  Open-Door  policy 
not  only  guaranteed  but  secured,  they  would  have 
no  fear  of  the  future. 

They  committed  a  resolution  to  my  care  for 
transmission  to  the  Associated  Chambers  of  Com- 
merce.   ( Vide  Appendix.) 


The  high  Chinese  authorities  at  Tientsin  paid 
me  every  courtesy  and  ceremony,  meeting  me  at 
the  station  and  making  every  arrangement  for  my 
comfort  in  the  train  or  on  steamers,  when  travel- 
ling to  Peking,  or  Tongshan,  or  Hsiao-Chau  one 
of  them  usually  paying  me  the  compliment  of  ac- 
companying me. 

While  at  Tientsin  I  had  interviews  with  his 
Excellency  Yu  Lu,  the  Viceroy,  and  the  Taotai 
Li.  Their  Excellencies  were  aware  that  I  repre- 
sented the  Associated  Chambers  of  Commerce. 



They  both  expressed  great  friendliness  towards 
Great  Britain ;  they  declared  they  were  very  anx- 
ious as  to  the  future  of  their  country,  that  at  pres- 
ent China  was  helpless,  and  that  all  the  Eu- 
ropean countries  were  taking  advantage  of  this 
fact,  and  by  bullying  China  were  making  her  ac- 
quiesce in  schemes  to  which  she  was  naturally 

They  said  that  Russia  insisted  on  China  giving 
concessions  which  she  was  helpless  to  refuse,  and 
that  Great  Britain  immediately  demanded  why 
such  concessions  were  given,  and  either  made 
China  pay  heavily,  or  give  an  equivalent  which 
China  was  equally  helpless  to  refuse. 

On  my  informing  their  Excellencies  that  under 
present  conditions  I  could  see  nothing  but  the  dis- 
integration of  China,  and  giving  my  reasons  for 
such  a  statement,  they  replied  that  I  had  been  very 
frank,  that  they  appreciated  it,  and  that  they  in- 
tended to  communicate  their  views  on  the  subject 
to  the  proper  authorities.  Their  Excellencies  were 
perfectly  clear  that  my  remarks  had  reference 
solely  to  the  future  development  of  Anglo-Saxon 
trade  and  commerce,  and  its  security. 

I  found  the  relations  between  the  British  and 
German  merchants  here  upon  a  most  sympathetic 
and  satisfactory  footing.  I  was  entertained  by  the 
leading  German  merchant,  where  I  met  all  the 
principal  merchants  of  the  place,  of  different 
nationalities.  The  remarks  made  by  the  Germans 
showed  how  thoroughly  they  appreciated  that  it 



was  Anglo-Saxon  energy,  enterprise,  and  capital 
which  had  originally  made  a  platform  for  trade  in 
China,  and  had  given  an  equal  opportunity  to  the 
trade  of  all  nations. 



On  October  25,  1898,  I  paid  a  visit  to  Tong- 
shan,  proceeding  thither  from  Tientsin  by  the 
Shanhaikwan  Railway.  This  railway  has  been 
engineered  and  built  by  Mn  Kinder,  a  British 
subject  of  great  ability  and  energy. 

It  may  be  well  to  give  a  description  of  this  rail- 
way and  its  intended  extension,  as  the  money  has 
been  found  by  a  British  Corporation.  It  is  the 
railway  that  has  evoked  considerable  public  inter- 
est, owing  to  the  serious  misunderstandings  which 
have  occurred  between  the  British  and  Russian 
Governments  with  regard  to  the  nature  of  the 
securities  given  by  the  Chinese  Government. 

The  railway  at  present  is  opened  for  traffic  from 
Tientsin  to  Chunghouso,  forty  miles  beyond  the 
Great  Wall,  a  distance  of  three  hundred  miles, 
and  will  shortly  be  opened  to  Kinchow,  a  farther 
distance  of  about  seventy-six  miles. 

On  the  security  offered  by  the  Chinese  Govern- 
ment, between  two  and  three  millions  of  British 
capital  were  subscribed  towards  the  construction 
of  this  railway  to  the  port  of  Newchwang. 

The  form  of  the  original  security  was  altered 
altogether,  in  deference  to  the  vigorous  protests 



of  the  Russian  Government,  and  it  was  agreed 
that  those  who  had  subscribed  towards  the  loan 
should  have  a  lien,  not  upon  the  extension  of  the 
railway,  as  originally  intended,  but  upon  its  re- 
ceipts, and,  further,  that  the  engineer  and  those  con- 
nected with  the  accountant  branch  should  be  British. 

It  has  been  agreed  between  the  Chinese  Gov- 
ernment and  the  British  Corporation  to  make  an 
extension  of  the  railway  from  Kinchow  to  Sin-min- 
thun,  a  farther  distance  of  one  hundred  and  twelve 
miles.  In  addition  to  this,  it  is  intended  to  make 
two  branch  lines,  one  of  fifty-five  miles  length,  be- 
tween the  junctions  fixed  on  the  main  line,  about 
ten  miles  to  southeast  of  Kwangnin  and  Yingkau, 
near  Newchwang.  The  other  branch  line  is  in- 
tended to  go  to  the  Nan-Paian  coal-fields,  from  a 
place  called  Kaobhaio,  about  thirty  miles  to  the 
northwest  of  Kinchow. 

In  the  future  it  is  intended  to  bridge  the  Liao 
River  near  Sin-min-thun,  and  carry  the  line  to 
Mukden,  where  it  might  join  the  Russian  main  line 
to  the  north,  about  thirty  miles  from  the  Liao  River. 

The  Chinese  railway  gauge  is  4  ft.  8^  in.,  the 
Russian  gauge  is  5  ft. 

The  total  extension  of  the  railway,  after  the  line 
to  Kinchow  is  finished,  will  be : 

To  the  Nan-Paian  collieries 30  miles 

From  Kinchow  to  Junction  for  Yingkau  .  45      " 

From  Junction  to  Sin-min-thun  ....  67      " 

From  Junction  to  Yingkau 55      " 

Total 197      " 



The  coal-fields  at  Nan-Paian  are  very  large,  and 
the  coal  is  of  excellent  quality.  There  are  also 
very  rich  coal  and  iron  deposits  in  Kwangnin. 
From  the  high  quality  of  these  deposits,  their 
proximity  to  the  sea,  the  splendid  climate  (very 
similar  to  Canada),  and  available  labor,  it  becomes 
a  question  of  argument  whether  any  other  similar 
deposits  in  China  would  be  as  profitable  as  these 
in  the  immediate  future. 

I  visited,  in  company  with  Mr.  Kinder,  the  Tong- 
shan  workshops,  where  I  elicited  the  following  facts: 


Native  employes  engaged  in  connection  with  the 
Tongshan  Railway  workshops,  about  one  thousand. 

Annual  cost  of  the  maintenance  of  native  staff 
amounts  to  ;^ii,c)00. 

Foreign  staff  employed  consists  of  one  locomo- 
tive superintendent,  one  accountant,  one  drafts- 
man, one  store-keeper,  one  shop  foreman,  one 
boiler-maker,  the  yearly  salaries  of  which  amount 
to  ;^i866. 

Average  construction  of  rolling-stock  for  one 

Various  ten-ton  cars 146 

"       twenty-ton  cars 216 

Passenger  cars — 

First-class 10 

Second-class 28 

Brake  vans  (eight-wheeled) 10 

Cars  rebuilt — 

Various  fifteen-ton  cars 8 

"       twenty-ton  cars 4 



Approximate  cost  of  running  the  shops  per 
year,  including  rent  to  mining  company,  water, 
gas,  fuel,  salaries  of  foreign  employes,  wages  of 
native  empIoy&  and  workmen,;^  14,100. 

The  approximate  value  of  the  Tongshan  work- 
shops, with  their  present  equipment  of  machinery, 
is  estimated  at  ;^48,ooo. 

One  thousand  and  fifty  square  yards  comprises 
the  covered  area  of  shops. 

The  entire  area  of  the  works  covers  seventeen 

The  total  consumption  of  fuel,  as  consumed  by 
the  workshops,  is  as  follows  per  annum : 

No.  5  quality 16  tons. 

"9      " 50     " 

"    5  dust 200     " 

"    9     " 2234     " 

"    I  coke 186     " 

"    2     **........     151     " 

Statistics  for  Locomotive  Department  from 
Tientsin  to  Chunghouso,  covering  a  distance  of 
two  hundred  and  thirteen  miles. 

Locomotives  chiefly  used — Dubs's,  manufact- 
ured in  Glasgow.  The  others  are  Baldwin's 

Average  per  month :  thirty-six  locomotives  run- 

Mileage : 

Train 42,453  miles. 

Shunting ^Sf^S^     " 

Construction 9,666     ** 



Light 142  miles. 

Total  engine  mileage 67,411      " 

Consumption  of  coal 3,681,683  cwts. 

"  per  engine  mile  .    .  54     " 

Working  of  Engines : 

1 .  Wages  of  native  drivers  and 

cleaners,  etc.,  including 

overtime Taels  2290  =  £$24. 

2 .  Wages  of  foreign  inspectors 

and    drivers,    including 

overtime "         940  =      133 

3.  Fuel "       5225  =     740 

4.  Stores  (foreign  and  native)        **        316=       44 

5.  Lubricants  (foreign  oil  and 

native  oil) "        750  =     106 

6.  One-third  of  salaries  of  for- 

eign officials,  clerks,  etc.        *^        520  =       75 


Repairs  to  Engines: 

7.  Materials  for  repair  of  en- 

gines, with  proportion  of 

shop  expenses  ....    Taels   1778  =  ;^25i 

8.  Wages  for   repair  of  en- 

gines, with  proportion  of 

shop  expenses  ....        "       1578  =     223 

9.  Stores  consumed  by  steam 

sheds "         121  =       17 

10.  Miscellaneous  coolie  hire, 

etc "        274  =       38 

Total  expenditures  of  Locomotive  Department,  £tgs  i 




Engines  per  Engine  Mile. 

Working  Expenses. 

Nos.  7,  8,  9,  10. 
Total  cost  of  repairs. 

Total  cost  of  repair- 
ings  and  workings. 


October  31st. 

Nos.  I,  3,  6. 

Salaries  of 

f  orei^  officials, 

native  clerks, 

drivers,  etc. 

No.  3. 

Nos.  4,  5. 

stores,  etc. 


cost  of 


Average  per 

month  taken  from 

the  working  of 

the  past  SIX 


0  0   If 

0   0  2f 

£  s.  d, 

0  0  oj 


0  0  If 


During  the  past  twelve  months  four  locomotive 
boilers  were  retubed,  five  locomotive  fire-boxes  re- 
placed, and  two  locomotive  boilers  replaced. 

The  average  life  of  boiler-tubes  in  China  extends 
over  a  period  of  two  years ;  boilers,  fifteen  years  ; 
fire-boxes,  five  years. 

The  oldest  engine  now  running  is  the  "  Rocket 
of  China,"  manufactured  by  C.  E.  &  M.  Co.,  1880. 

The  oldest  imported  engines  are  from  Stephen- 
son, Newcastle,  and  came  to  China  in  1883. 

I  found  Mr.  Kinder  was  employing  engines  of 
American  manufacture — Baldwin's.  On  inquiring 
why  he  was  giving  up  using  English  engines,  he 
gave  me  the  following  facts : 

He  had  applied  to  several  English  firms,  but 
they  could  not  deliver  according  to  his  specifica- 
tion, either  as  regards  price  or  time.     The  English 

price  was  ;^28oo,  with  twenty-four  months  to  de- 



liver.  The  American  engines  were  only  ;^i85o, 
and  four  and  a  half  months  to  deliver. 

He  said  the  American  engines  were  not  so 
good,  but  quite  good  enough  for  his  purpose. 
The  Americans  use  steel  instead  of  copper  and 
brass  for  various  fittings,  and  instead  of  turning 
the  axle  down  to  get  a  collar  for  the  wheel,  as  the 
English  do,  they  simply  screwed  a  collar  on  to  the 

Mr.  Kinder  was  building  engines  himself,  which 
he  estimates  will  cost  ;^i6oo  each.  I  saw  the  first 
engine  nearly  complete.  He  makes  everything 
at  the  works  excepting  wheels  and  axles.  Mr. 
Kinder's  great  difficulty  was  in  getting  skilled 

The  couplings  used  throughout  the  North  China 
railways  are  the  American  automatic  coupling, 
costing  ;^io  per  car. 

The  railway  from  Peking  to  Shanhaikwan  (3CX5 
miles)  cost  ;^6ooo  a  mile,  everything  included — 
!>.,  rolling-stock,  workshops,  etc. 

This  line  is  laid  with  85-lb.  steel  rails  as  far  as 
Lukowchiao.  From  Tientsin  to  Chunghouso  it 
has  70-lb.  rails  for  thirty  miles,  and  60-lb.  rails  for 
the  remainder.  All  of  the  rails  are  of  Sandberg 
design  and  inspection.  At  present  the  average 
age  of  rails  is  about  five  years. 

I  obtained  the  above  statistics,  and  have  set 
them  out  here  at  some  length,  because  I  thought 
they  would  be  of  service  at  home  to  those  inter- 
ested in  Chinese  railway  enterprise.     The  figures 



give  the  original  cost,  outlay,  and  care  and  main- 
tenance charges  for  what  is  at  present  the  only 
railway  in  China,  excepting  the  seventeen  miles 
between  Shanghai  and  Woosung. 


I  visited  the  coal-mine  at  Tongshan.  The  out- 
put is  two  thousand  tons  a  day.  It  could  be  more. 
This  mine  pays  a  high  dividend  now.  It  was  ten 
years  before  it  paid  at  all. 

There  are  one  thousand  men  employed.  The 
Chinese  make  first-rate  miners  under  European 
foremen.  The  coal  costs  from  gs.  to  1 2S.  a  ton  at 
the  pit's  mouth. 

I  saw  a  new  shaft  being  sunk,  which  will  event- 
ually be  from  15CX)  to  1700  feet  in  depth.  The 
Germans  got  the  contract  for  this  shaft  and  all 
the  machinery  connected  with  it,  although  their 
tender  was  ;^20(X>  more  than  any  English  tender. 
I  was  told  this  was  to  promote  friendly  feeling. 

I  found  the  following  further  details  connected 
with  this  mine : 

Total  output  of  coal,  1896    .    .    •    Tons  488,540 

1897  ...       "     538,520 

1898  (estimated)  '^     650,000 
Total  output  since  commencement 

to  end  1898  (estimated  for  1898)    .     "  4,524,119 

The   above    outputs    include    the   Company's 

mines  at  Tongshan  and  Liusi. 


«  C(  «         « 

It  «  «      (( 


Proportion  of  lump  coal,  about  35  per  cent. 
"  "  dust      "        "     65    "      " 

Total  output  of  coke,  1895  •  •  •  •  Tons  11,136 
"  "  "  "  1896  ....  "  24,097 
«•        "        «"      1897  ...    .      "        29,428 

N.B. — There  has  been  so  far  no  serious  at- 
tempt made  to  manufacture  coke  by  European 

Average  number  of  hands,  between  4000  and 
5000,  inclusive  of  surface  hands. 

There  are  three  shafts  in  Tongshan — 

Shaft  No.  I    .    .    .    .    600  feet  deep 
"      «    2   ....    300    "      " 
"      "    3   .    .    .    .  1300    "      " 

now  being  sunk,  to  be  eventually  brought  to  a 
depth  of  1 500  or  1 700  feet. 

Water  pumped  80  to  100  cubic  feet  per  minute. 

Liusi  Colliery,  near  Kuyeh,  raises  about  450 
tons  per  diem ;  shaft,  300  feet  deep. 



The  estimated  population  is  60,000 


The  total  value  of  trade  in  1897  was  Hk.  Taels  26,358,671 
(over  ;^3,7oo,ooo). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 

was  730,964,  of  which  363,922  was  British. 

I  ARRIVED  at  Newchwang  November  4,  1898. 
On  landing  I  was  met  by  a  number  of  the  British 
residents,  who  expressed  themselves  most  grateful 
to  the  Associated  Chambers  of  Commerce  for  hav- 
ing sent  out  a  representative  to  inquire  into  the 
state  of  British  trade  and  its  future  security  in 

They  declared  themselves  much  alarmed  for  the 
future,  since  they  regarded  Manchuria  as  really  a 
Russian  province,  owing  to  the  heavy  garrisons  of 
Russian  troops  scattered  throughout  the  country. 

They  said  that  though  the  Russians  might  not 

impose  a  tariff  on  goods  just  at  present,  they  were 

placing   themselves  in  such  a  powerful    military 

position  that  they  would  be  able  to  do  so  in  the 

near  future. 




The  port  of  Newchwang  is  one  of  the  most  im- 
portant in  China  to  the  British  merchant.  British 
trade  has  increased  there  far  more  in  proportion 
during  the  last  few  years  than  anywhere  else. 

Butterfield  &  Swire,  with  thirty-five  steamers,  in 
1897  made  two  hundred  and  fifty  trips  in  and  out 
of  Newchwang. 

Jardine  &  Matheson  made  about  an  equal  num- 
ber of  trips. 

Memorandum  showing  increased  value  of  trade 
in  foreign  goods  at  the  Northern  as  compared 
with  the  Yangtse  ports  during  the  ten  years 





Newchwang  . 

•    •    2,745,636  taels. 

^95,929  taels. 

Tientsin    .     . 

.    .  13,741,010     " 

30,212,260     " 

Chef 00.     .     . 

.    .    4,630,536     " 

11,066,410     " 

21,117,182     " 

50,274,599     " 

(About  ;f3,ooo,ooo) 

(About  ;^7,ooo,ooo) 

Chungking    . 

8,443,947  taels. 

Ichang .     .     . 

•     •     i,9SS»3S3  taels. 

647,902     " 

Hankow    .     . 

.     .  10,528,981      " 

17,172,351     " 

Kiukiang .     . 

•     •    3,329,937     " 

6,563,311     " 

Wuhu  .     .     . 

.     .     2,094,036     " 

3,700,373     " 

Chinkiang     . 

.     .     9,084,409     " 

13,285,419     " 

26,992,716     " 

49,813,303     " 

(Nearly  ;f  4,000,000) 

(About  ;f  7,000,000) 




When  I  was  there,  twenty  steamers  and  over 
two  thousand  junks  were  lying  in  the  river  at  the 

It  must  be  remembered  that  there  are  only  two 
doors  open  to  the  sea  for  importing  trade  into  the 
vast  province  of  Manchuria,  one  is  Newchwang, 
and  the  other  is  Talienwan. 

Talienwan  is  closed  at  present;  and,  even  if 
opened  in  the  future,  is,  I  am  informed,  being 
made  so  powerful  that  it  could  be  closed  at  will. 

The  backbone  of  the  Chinese  coasting  trade 
under  the  British  flag  is  the  Newchwang  coasting 
trade — beans,  bean-cake,  pease,  and  kindred  stuffs. 
If  Newchwang  is  closed  the  whole  coasting  trade 
would  be  very  materially  affected. 

A  point  to  be  noted  is  that  the  Liao  River  at 
Newchwang  will  allow  vessels  to  load  to  a  draught 
of  17  ft.  6  in.  at  neap  tides,  and  18  ft.  6  in.  at 
spring  tides ;  while  at  Taku  the  draught  of  water 
is  only  from  8  ft.  to  1 1  ft. 

At  a  meeting  of  the  British  merchants  and  resi- 
dents, called  in  order  that  they  might  have  an  op- 
portunity of  laying  their  views  before  me,  I  elicit- 
ed the  following  opinions.  I  would  first  observe 
that  all  the  speakers  at  this  meeting,  without  ex- 
ception, spoke  as  if  Manchuria  had  been,  or  was 
going  to  be,  annexed  by  Russia.  This  is  worthy 
of  comment,  as  these  gentlemen  reside  on  the 

They  declared  their  wish  to  be  friendly  with 
the  Chinese,  and  to  work  cordially  as  traders  with 



them.  They  unanimously  expressed  an  opinion 
that  with  this  object  in  view  they  would  not  ask 
for  mining  or  other  rights  in  place  or  under  condi- 
tions which  would  interfere  with  Chinese  prejudice. 

They  were  most  anxious  to  obtain  a  concession 
on  the  north  bank  of  the  river  opposite  to  the 
town,  and,  indeed,  looking  to  the  increasing  value 
of  Anglo-Saxon  trade  and  commerce  in  this  port, 
this  desire  appeared  necessary  and  reasonable, 
more  particularly  as  most  of  the  old  concessions 
granted  to  the  British  had  subsided  into  the  river. 

The  concession  asked  for  is  the  only  available 
bit  of  ground,  and  the  merchants  expressed  fears 
that,  if  it  does  not  become  a  British  concession,  it 
certainly  will  become  a  Russian  concession. 

The  merchants  also  desired  that  the  east  end  of 
the  town  should  be  formed  into  a  foreign  settle- 
ment, with  equal  rights  to  the  representatives  of 
all  nations  who  might  reside  there. 

The  three  provinces  of  Manchuria  are  known 
to  be  very  rich  in  minerals,  and  the  merchants 
held  that  they  should  have  the  right  of  working 
mines  in  all  of  these  provinces,  where  any  foreign- 
ers, or  the  Chinese  themselves,  have  the  right  at 

The  valleys  have  rich  alluvial  soil,  capable  of 
producing  immense  crops  of  cereals,  and  there  are 
extensive  forests,  besides  vast  coal  areas.  Gold 
was  exported  to  Shanghai  in  the  year  1897  to  the 
value  of  ;^ 300,000.  Manchurian  coal  is  decidedly 
superior  to  Japanese  coal.     I  have  seen  both. 



They  also  called  attention  to  the  restrictions 
placed  upon  the  new  privilege  of  navigation  on 
the  waterways — i.e.,  that  steamers  are  only  allowed 
to  ply  within  the  area  of  the  port  where  they  are 
registered,  thereby  nullifying  the  advantage  that 
might  be  gained  by  a  free  navigation  of  the  rivers. 

The  merchants  complained  that  they  had  no 
right  to  take  steamers  up  the  Liao  River  as  far 
as  Kirin.  They  declared  Russians  had  the  sole 
privilege.  I  think  this  is  incorrect ;  but,  anyway, 
it  should  be  tested.  They  also  hoped  that  a  Brit- 
ish Consul  would  be  stationed  at  Kirin.  Looking 
to  the  rapid  manner  in  which  events  are  develop- 
ing in  Manchuria,  it  would  appear  reasonable  that, 
for  the  sake  of  the  interest  of  British  trade,  there 
should  be  some  Consular  authority  in  that  vast 
country — twice  as  large  as  France.  At  the  present 
moment  there  is  not  a  single  British  Consul  north 
of  Newchwang. 

These  merchants  also  complained  that  the  Rus- 
sians were  landing  railway  material  without  exami- 
nation or  payment  of  duty,  although  the  Customs 
are  allocated  to  pay  the  service  on  the  British 

They  appeared  to  be  very  anxious  as  to  the 
future  with  regard  to  the  large  and  increasing 
military  forces  which  Russia  continues  to  pour 
into  Manchuria.  As  Russia  has  no  trade  with 
Manchuria,  other  than  across  her  frontier,  the 
merchants  considered  their  trade   threatened  by 

such   exhibition   of   military    power.     They  de- 



scribed  the  proceeding  as  the  practical  annexa- 
tion of  the  country  going  on  under  their  very 

They  also  complained  that  there  was  no  Russian 
Consul  at  Newchwang,  which,  under  the  circum- 
stances, appeared  to  them  to  invite  complications, 
as  no  immediate  attention  could  be  paid  to  various 
difficulties  certain  to  arise  under  the  curious  con- 
dition of  local  affairs,  that  only  could  be  settled  by 
Consular  Agents  resident  in  the  place. 

They  also  pointed  out  that  there  was  noth- 
ing to  prevent  Russia  marching  into  Chihli,  if  she 
met  no  more  opposition  or  remonstrance  than 
she  has  already  received  with  regard  to  Manchu- 

The  British  merchants  wished  me  to  point  out 
to  the  Associated  Chambers  of  Commerce  that  the 
security  of  Anglo-Saxon  trade  in  the  north  of 
China  must  rest  on  something  more  definite  than 
assurances  and  promises  from  a  power  rapidly 
placing  herself  in  strong  military  positions,  to 
which  the  British  Government  have  offered  no 
counterbalance  whatever. 

A  number  of  resolutions,  embodying  the  fore- 
going ideas,  were  unanimously  passed  and  handed 
to  me  for  transmission  to  the  Associated  Cham- 
bers of  Commerce.    (For  copy  j^^  Appendix.) 

About  six  weeks  after  my  departure  from  New- 
chwang I  received  the  following  letter,  in  support 
of  the  foregoing  resolutions,  from  the  merchants  of 
Newchwang : 



"Newchwang,  2 2d  December^  1898. 

**My  Lord, — We  trust  you  will  excuse  our  addressing  you 
on  the  subject  of  the  resolutions  passed  by  the  British  resi- 
dents on  the  occasion  of  your  recent  visit  to  this  port,  as  the 
matter  is  of  vital  importance  to  us,  and  does  not  seem  to  be 
properly  appreciated  by  the  Government  and  the  public  at  home. 

"  I.  As  to  the  north  bank, we  need  only  say  that  the  eflforts 
of  our  Consul  and  our  Minister  have  been  successful,  and  that 
a  British  concession  has  been  granted,  opposite  to  the  present 
town  and  eastward  of  the  recently  granted  Japanese  concession. 

*^  2.  The  formation  of  the  east  end  of  this  town  into  a  for- 
eign settlement  would  be  very  desirable,  not  only  from  its 
intrinsic  merits,  but  also  as  maintaining  our  rights  on  this  side 
of  the  river,  which  might  otherwise  be  considered  to  have 
lapsed  with  the  grant  of  concessions  on  the  north  bank. 
Moreover,  as  the  carrying  and  import  trade  is  practically 
monopolized  by  Great  Britain,  Germany,  the  United  States, 
and  Japan,  the  co-operation  of  the  citizens  and  subjects  of 
these  Powers  in  the  proposed  settlement  would  be  another 
step  in  the  direction  of  commercial  alliance,  and  would  in- 
crease the  interest  of  those  Powers  with  us  in  keeping  '  open ' 
the  port  of  Newchwang  and  the  country  behind  it. 

'^  3.  The  establishment  in  the  interior  of  industrial  enter- 
prises, such  as  filatures,  oil-mills,  and  iron-works,  would  lead 
to  a  great  development  of  trade,  to  the  introduction  of  British 
machinery  and  skilled  labor,  and  to  the  profitable  employ- 
ment of  British  capital. 

''  But  an  indispensable  preliminary  is  the  right  to  acquire 
by  purchase — or,  to  speak  more  correctly,  on  perpetual  lease 
— land  in  the  interior,  on  which  these  and  other  commercial 
enterprises  can  be  uninterruptedly  carried  on. 

'^  Unless  we  can  hold  land  on  these  terms  we  are  liable  to 
be  prevented  from  renting  for  definite  periods,  and  to  hav6 
our  tenure  abruptly  terminated  owing  to  pressure  applied  by 
an  unfriendly  or  timorous  magistrate. 

'*  In  fact,  without  this  right  it  would  be  futile  to  expect 
capitalists  to  invest  their  money. 



''  Missionaries  exercise  the  right  of  holding  land  in  the  in- 
terior on  perpetual  lease,  and  erecting  buildings  thereon  for 
the  furtherance  of  Christianity;  why  should  not  similar  rights 
be  extended  to  merchants  for  the  furtherance  of  trade  ? 

*'  4.  Equally  important  is  the  right  to  work  mines  in  these 
provinces  on  as  favorable  terms  as  other  foreigners  and  Chi- 

"  At  present  we  can  only  mine  under  Chinese  names,  and 
though  our  doing  so  is  winked  at,  we  are  liable  to  be  stopped 
at  any  moment  by  unfriendly  magistrates  or  competing  Chi- 

"  We  wish  to  be  allowed  to  mine  under  our  own  names,  and 
as  a  matter  of  right,  not  of  favor,  subject,  of  course,  to  the  same 
dues  and  duties  as  are  paid  by  Chinese  mining  companies  or 



"  This  b  not  a  small  matter ;  the  mineral  wealth  of  these 
provinces  is  great,  gold  is  worked  in  many  parts  in  a  primi- 
tive manner,  lead  and  silver  are  also  found,  and  there  are 
traces  of  tin,  copper,  and  petroleum.  Iron  abounds,  and  in 
some  places  close  to  coal. 

"  Most  important,  however,  are  the  large  deposits  of  coal 
of  various  descriptions  —  anthracite,  semi-anthracite,  bitumi- 
nous, etc — only  requiring  machinery  to  develop  a  large  ex- 
port trade,  and  compete  in  the  Shanghai  market  with  Tientsin 
and  Japan. 

'*  If  we  neglect  this  opportunity,  you  may  rely  upon  it  that 
the  Russians  will  not  be  so  foolish.  In  a  very  few  years  they 
will  have  acquired  all  available  rights  by  purchase,  lease,  or 
otherwise — edging  out  us  who  have  tried  to  be  the  pioneers 
of  British  enterprise — and  then,  when  England  awakes  to  the 
value  of  these  mineral  treasures,  there  will  be  little  or  nothing 
left  unappropriated. 

''6  and  7.  A  British  Consular  Agent  at  Kirin  would  watch 
over  British  interests,  seeing  that  British  manufactures  were 
not  subject  to  any  discriminating  dues  or  other  disadvantages ; 
would  observe  and  report  upon  the  political  state  and  com- 
mercial prospects  of  the  North,  and  the  movements  of  Rus- 



sians  and  others ;  and  would  be  in  a  peculiarly  favorable  posi- 
tion for  obtaining  prompt  redress  for  any  infringement  of  the 
Treaty  rights  of  British  missionaries  and  merchants. 

'^  5  and  8.  The  port  of  Newchwang  is  the  natural,  and  has 
thus  far  been  the  actual,  outlet  and  inlet  for  the  trade  of  the 
three  Manchurian  provinces,  and  of  part  of  Chihli  and  Mon- 
golia. Its  position  at  the  mouth  of  the  River  Liao  gives  it 
the  advantage  of  cheap  water  carriage  to  distribute  imports 
and  collect  produce  for  export. 

"  The  freight  carried  by  boats  in  the  summer  is  borne  in 
the  winter  by  carts,  carrying  on  an  average  22  cwt,  which  take 
advantage  of  the  frozen  ground  to  bring  down  loads  of  beans, 
oil,  maize,  millet,  and  grain,  spirits,  hemp,  leaf -tobacco,  and 
general  produce ;  and  taking  back  to  the  North  cotton,  wool- 
len, and  silk  piece-goods,  cotton  yarn,  raw  cotton,  kerosene- 
oil,  metals,  especially  iron ;  sugar,  matches,  needles,  glass,  and 
other  imported  goods. 

"  Besides  this,  the  smaller  inland  towns  on  the  Liao  and  its 
branches,  which,  during  summer,  sent  produce  to  and  receive 
imports  from  this  port  by  river,  are,  during  the  winter,  each 
of  them  the  scene  of  similar  activity,  though  on  a  somewhat 
smaller  scale. 

'*  This  trade  has  been  principally  developed  by  British  en- 
terprise. Great  part  of  the  imports  are  of  British  and  Colo- 
nial origin,  and  50  per  cent,  of  the  tonnage  employed  in  the 
carrying  trade  is  under  the  British  flag. 

"  The  value  and  volume  of  this  trade  is  annually  increasing, 
and  will  continue  to  increase  if  no  artificial  obstacles  are  inter- 

"  But  it  may  be  diminished,  or  entirely  destroyed,  in  any 
one  of  the  following  ways : 

*^  By  prohibitory  transit  dues  levied  at  various  points  on  the 
principal  land  and  river  routes  leading  to  this  port. 

''  By  admitting  goods  free  of  duty  by  rail  into  these  provinces. 

**  By  granting  a  drawback  on  goods  of  Russian  origin,  or 
passing  through  Russian  hands. 



"  It  is  necessary,  therefore,  to  guard  against  the  possibility 
of  such  action,  by  keeping  '  open '  not  only  this  port,  but  the 
whole  of  Manchuria;  for  an  'open  door'  leading  to  a  closed 
country  will  be  of  no  more  use  to  merchants  than  would  a 
Barmecide's  feast  be  to  a  starving  man. 

'*We  append  some  figures  and  further  facts  in  support  of 
our  contention  that  our  rights  in  Newchwang  and  Manchuria 
should  not  be  lightly  abandoned,  as  if  they  were  of  no  present 
or  future  value. 

"The  value  of  the  trade  in  1897  was  26,358,671  Haikwan 
taels,  being  an  increase  of  3,500,000  taels  over  1896,  which 
again  was  5,000,000  taels  in  excess  of  any  previous  year. 
The  returns  for  the  current  year  are  not  yet  made  up,  but  it 
is  an  open  secret  that  there  is  again  an  increase  over  the 
values  for  1S97. 

"  If  then  the  trade,  under  present  circumstances,  is  capable, 
year  by  year,  of  such  great  expansion,  it  is  natural  to  suppose 
that  it  will  increase  to  an  enormous  extent  when  this  country, 
with  its  great  grain-growing  areas,  mineral  wealth,  forests,  etc., 
is  opened  up  by  railways. 

"Why  should  this  magnificent  country,  with  an  area  of 
390,000  square  miles,  be  looked  upon  as  a  Russian  preserve  ? 
What  excuse  is  there  for  the  tendency  at  home  to  consider  it 
as  such } 

"  Russia,  so  far  from  needing  Manchuria  as  an  outlet  for 
her  surplus  population,  has  not  yet  been  able  to  colonize  so 
much  as  one-half  of  her  own  possessions  in  the  north  of  Asia. 
As  to  trade,  she  has  little  in  the  north  of  Manchuria,  and  none 
in  the  south,  except  the  proverbial  cargo  of  sea-weed,  which 
has  duly  arrived  this  year. 

"In  1897  British  shipping  amounted  to  181,961  tons,  half 
of  the  whole.  Russian  shipping  amounted  to  713  tons,  jf^  of 
the  whole. 

"  From  the  opening  of  the  port  to  the  present  time  the  for- 
eign resident  merchants  have  nearly  all  been  Britishers,  and 
the  foreign-owned  land  in  the  proposed  settlement  and  else- 
where is  largely  in  British  hands. 



''To  carry  on  the  trade,  British  merchants  have  invested 
large  sums  in  land,  houses,  godowns,  wharves,  etc.;  nor  must 
it  be  forgotten  that,  in  common  with  other  Treaty  ports,  New- 
chwang  was  opened  by  the  expenditure  of  British  blood  and 

"  We  also  desire  to  point  out  the  importance,  from  a  na- 
tional point  of  view,  of  not  allowing  Manchuria  to  be  annexed 
by  Russia ,  for  should  Manchuria  pass  into  the  hands  of  that 
Power,  not  only  would  this  *door'  be  'closed,'  but  British  in- 
terests in  China  proper  would  be  seriously  menaced,  and  the 
unopposed  absorption  of  these  provinces,  with  their  hardy  and 
spirited  peasantry,  would  inevitably  be  the  prelude  of  a  suc- 
cessful march  southwards  towards  India. 

*'  In  conclusion,  we  trust  that  you  will  use  your  great  in- 
fluence to  impress  on  the  British  Government  and  people  the 
importance  of  British  interests  in  Manchuria,  and  how  serious- 
ly those  interests  are  menaced  at  the  present  moment 

"We  are.  My  Lord, 

"  Your  Obedient  Servants, 
"  Bandinel  &  Co. 
"  Bush  Bros. 
"  Pro  Butterfield  &  Swire, 

"  Daesutt. 
"J.  Edgar. 
"  To  Rear- Admiral  the  Right  Honorable 
"  Lord  Charles  Beresford,  C.B., 
"  London." 

With  regard  to  the  above  observations  of  the 
British  merchants,  it  may  be  well  to  mention 
here  things  which  came  within  my  own  knowl- 

With  respect  to  Observation  2,  the  request  for 

a  foreign  settlement  for  all  nationalities  appeared 

to  me  to  be  most  reasonable  in  the  interests  of 

equal  opportunity,  and  the  "  Open  Door  "  policy 



for  all  nations.  Newchwang  is  certain  to  be  the 
distributing  centre  for  the  north. 

The  Chinese  authorities  I  spoke  to  on  this  mat- 
ter were  most  friendly,  and  heartily  in  sympathy, 
and  promised  to  do  what  they  could  to  forward  it. 
The  Chinese  even  went  so  far  as  to  say  that  they 
would  grant  money  to  make  roads.  This  great 
friendliness  dates  from  the  Chi  no- Japanese  war, 
when  the  British  had  a  Red  Cross  hospital  for  the 
northern  Chinese  armies,  and  tended  10,000  of  the 
wounded.  In  return  they  built  a  hospital  entirely 
out  of  Chinese  money  at  Newchwang.  Dr.  Daly, 
a  British  subject,  now  manages  it.  I  went  Over 
the  hospital,  and  found  its  arrangements  excellent. 

With  reference  to  Observation  4,  viz.,  the  grant 
of  mining  rights,  this  would  unquestionably  fur- 
ther the  policy  of  the  "  Open  Door,"  as  it  would 
give  all  nations  a  chance  of  profiting  by  the  de- 
velopment of  the  enormous  latent  mineral  riches 
of  Manchuria.  I,  however,  pointed  out  to  the 
merchants  that  as  matters  at  present  existed  there 
was  nothing  whatever  to  prevent  them  acquiring 
properties  in  Manchuria,  and  that  the  best  thing 
they  could  do  would  be  to  invest  capital  in  Man- 
churia, so  as  to  give  the  British  Government  some 
right  to  demand  security  for  vested  interests.  I 
showed  that  there  was  nothing  at  present  which 
excluded  them  from  equal  opportunity  in  obtain- 
ing concessions  in  Manchuria. 

Again,  as  to  Observation  5,  the  merchants  here, 
as  in  all  other  places,  called  attention  to  the  restric- 



tion  placed  upon  them  by  the  new  navigation  laws, 
which  materially  interfere  with  trading  progress. 

With  respect  to  Observation  6,  it  appeared  to 
me  to  be  imperatively  necessary  that  there  should 
be  a  British  Consul  stationed  at  Kirin,  in  order 
that  some  official  account  could  be  rendered  of 
what  the  Russians  are  really  doing  in  Manchuria. 
At  present  all  accounts  come  from  missionaries  or 
merchants,  and,  under  the  circumstances  of  the 
case,  might  be  minimized  or  exaggerated. 

As  regards  the  free  landing  of  Russian  railway 
plant,  referred  to  in  the  merchants'  Resolutions 
given  in  the  Appendix,  and  in  their  observations 
to  me,  I  may  say  that  I  myself  saw  steamers  pass 
the  Custom -House  and  proceed  to  the  Russian 
landing-place,  called  Newchiatung,  without  any 
examination  on  the  part  of  the  Custom- House 
whatever.  When  I  was  at  Newchwang  already 
thirteen  large  Russian  steamers  had  passed  with- 
out examination.  I  questioned  the  Chief  Com- 
missioner of  Customs  on  this  point,  and  he  in- 
formed me  that  he  had  orders  from  Peking  that  he 
was  in  no  way  to  interfere  with  these  steamers.  I 
was  informed  that  they  contained  railway  material. 
It  would  be  as  well  here  to  mention  the  exact 
terms  of  the  contract.  They  are  shortly  as  fol- 
lows :  The  railway  is  being  built  by  the  Russians 
under  a  contract  with  the  Chinese  Government, 
nominally yi7r  China.  After  eighty  years  China  is 
supposed  to  take  it  over.  Russia  in  the  mean- 
time makes  the  line,  advances  the  cost,  and  under- 



takes  its  maintenance,  working,  and  protection. 
The  Russians  made  it  a  condition  of  their  con- 
tract that  all  material  and  plant  used  in  the  work, 
and  brought  from  abroad,  is  to  be  landed  in  China 
free  of  duty. 

Thirty-six  thousand  tons  of  railway  material, 
among  which  were  thirty  Baldwin  engines,  have 
been  shipped  to  Newchwang. 

It  is  only  fair  to  point  out  here  that  the  Imperial 
Chinese  Railway  now  continuing  its  line  from 
Shanhaikwan  to  Newchwang,  under  an  agreement 
with  a  British  corporation  who  have  advanced  the 
capital,  have  also  been  granted  the  right  of  land- 
ing their  material  and  plant  duty  free ;  but  the 
cases  are  not  practically  the  same,  although  they 
may  appear  so  theoretically.  The  Trans  -  Man- 
churian  Railway  is  admittedly  a  strategic  railway ; 
it  is  financed,  built,  protected,  and  administered 
solely  by  Russians,  and  is  supposed  to  revert  to  the 
Chinese  in  eighty  years.  The  Shanhaikwan  Rail- 
way is  not  strategic,  but  is  built  to  open  up  the 
trade  of  the  country;  it  is  financed  by  a  British  . 
corporation,  built,  protected,  and  administered  by 
Chinese,  and  is  to  revert  to  them  when  they  have 
repaid  the  borrowed  money. 

The  exemption  of  railway  materials  from  duty 
is  a  matter  of  considerable  importance  to  bond- 
holders, in  that  it  affects  the  value  of  their  security 
for  the  loans  made  to  China.  Till  1897  there  was 
no  railway  in  China,  except  that  running  from 
Peking  via  Tientsin  and  Shanhaikwan ;  the  ordi- 



nary  materials,  sleepers,  rails,  etc.,  required  for  this 
line,  it  was  customary  to  pass  duty  free  under 
Government  certificate.  Whether  such  a  proced- 
ure was  thoroughly  equitable  is  open  to  question, 
seeing  that  the  foreign  Customs  revenue  had  been 
almost  entirely  hypothecated.  The  subsequent  ex- 
tension of  this  procedure  certainly  seems  inequi- 
table. Even  under  the  old  procedure  machinery 
imported  by  this  railroad  had  been  required  to 
pay  duty,  and  machinery  was  held  to  include  loco- 
motives ;  but  towards  the  end  of  1897  the  director- 
in-chief  of  the  Peking-Tientsin-Shanhaikwan  Rail- 
way, Hu  Yen  Mei,  protested  to  the  Throne  against 
the  levy  by  the  Tientsin  Customs  of  the  duty 
on  locomotives.  He  obtained  Imperial  sanction 
to  everything  required,  by  his  railroad  being  ex- 
empted from  Customs  duty.  Since  then  many 
contracts  have  been  entered  into  for  the  construc- 
tion of  very  extensive  lines  of  railroad,  and  in  sev- 
eral of  these  contracts  it  is  explicitly  stated  that 
the  duty  treatment  in  regard  to  materials  for  the 
Shanhaikwan  line  shall  apply  to  materials  required 
for  these  new  lines.  The  result  will  be  that  ma- 
terials and  machinery  required  for  most,  if  not  all 
the  lines  to  be  hereafter  contracted,  will  be  ex- 
empted from  payment  of  duty.  Were  the  foreign 
Customs  revenue  unencumbered,  such  a  system 
would  not  perhaps  be  of  much  moment,  because 
collection  of  duty  would  simply  amount  to  taking 
money  from  the  coffers  of  one  Government  De- 
partment to  pay  it  into  those  of  another,  but  it  is 



a  different  question  to  curtail  the  source  of  in- 
come of  the  foreign  Customs  after  more  than  the 
whole  of  that  income  has  been  hypothecated  to 
foreign  countries.  On  the  other  hand,  some 
bond-holders  may  be  glad  enough  to  risk  this,  in 
order  to  give  facilities  for  opening  up  the  country. 

With  regard  to  the  apprehension  expressed  by 
merchants  as  to  the  increasing  number  of  Russian 
troops  in  Manchuria  and  the  addition  of  military 
posts,  as  far  as  I  could  gather  from  those  in  a 
position  to  know,  there  are  about  120,000  Rus- 
sians in  Eastern  Siberia  and  Manchuria. 

I  was  informed  that  the  Russian  flag  is  hoisted 
at  Lunkkin,  twelve  miles  this  side  of  Kinchow. 
I  was  also  informed  that  the  Chinese  flag  had 
been  originally  hoisted  alongside  the  Russian. 

I  saw  many  armed  Cossacks  in  Newchwang, 
both  in  the  town  and  along  the  railway.  They 
were  placing  a  telegraph  line  in  the  middle  of  the 
main  street,  the  poles  of  which  blocked  the  traffic. 

There  can  be  no  question  that  the  Russians  are 
at  present  in  a  position  of  tremendous  military 
advantage  in  the  event  of  anything  occurring 
which  might  involve  a  warm  argument  as  to  what 
was  necessary  for  the  proper  security  of  British 
trading  interests. 

It  is  not  unnatural  for  the  British  merchants  to 
ask  why  these  forces  are  there,  and  what  they  are 
going  to  do.  British  trade  with  Manchuria  is 
over  ;^  3,000,000,  with  an  upward  tendency.  Rus- 
sian trade  with  Manchuria  is  nil,  except  a  very 



limited  amount  over  the  land  frontier,  and  three 
cargoes  of  sea-weed  which  I  found  had  been  im* 
ported  from  Vladivostock  since  the  year  1897. 

I  found  not  only  the  British  merchants  but  the 
Chinese  themselves  were  much  exercised  at  there 
being  no  Russian  Consul  at  Newchwang.  The 
Chinese  were  excited,  as  their  crops  were  fre- 
quently destroyed  by  Russians  when  preparing  the 
ground  for  railway  embankment.  As  there  has 
been  no  Consular  authority  for  them  to  apply  to, 
there  have  been  constant  disturbances  on  this 
question,  the  more  serious  trouble  being  at  a  place 
called  Shiung  Yo. 

One  of  the  cases  that  came  to  my  own  knowl- 
edge was  that  of  a  Chinese  servant  in  the  employ 
of  Messrs.  Butterfield  &  Swire,  whose  land  was 
appropriated  for  railway  purposes,  and  no  price 
paid  as  compensation.  The  servant  applied  to 
the  British  Consul,  who,  of  course,  could  do  noth- 
ing, and  the  servant  suffered  because  there  was  no 
Russian  Consul  to  refer  it  to. 

The  proposed  Russian-Manchurian  Railway  is 
mainly  military  and  strategic.  The  Chinese  have 
no  voice  whatever  in  its  management  or  direction. 
It  is  built  by  Russians  with  Russian  capital,  and 
protected  along  its  entire  route  by  armed  Cossack 

As  far  as  I  could  gather  from  those  who  were 

in  a  position  to  give  me  solid  information,  there 

will  be  rough  but  effective  rail  communication 

from  Russia  to  Port  Arthur,  certainly  in  five  years 



from  the  present  date,  but  most  probably  in  less 

When  I  was  there,  the  branch  line  of  fourteen 
miles,  from  Newchwang  to  the  main  line,  was  prac- 
tically finished,  and  there  were  about  one  hundred 
miles  of  the  main  line  nearly  ready  for  the  metals. 
The  bridge  at  Liao-Yang  would  not  be  finished 
for  another  eight  months  —  />.,  till  June  or  July, 
1899.  There  are  some  extensive  tunnels  to  be 
made  through  the  mountains,  and  till  these  are 
completed  the  trains  will  zigzag  over  the  hills. 
I  observed  tremendous  activity  for  the  speedy 
completion  of  the  line. 

The  rolling  stock  and  railway  material  is  landed 
on  the  Russian  ground  at  Newchiatung  by  means 
of  a  floating  eighty -ton  pair  of  shears,  built  at 
Southampton,  England.  All  rolling  stock,  and 
rails  and  sleepers,  etc.,  come  from  America.  With 
the  exception  of  these  shears  there  will  not  be 
;^  10,000  worth  of  expenditure  which  will  go  into 
English  pockets.  The  Russians  have  determined 
not  to  purchase  anything  in  England  unless  it  is 

This  railway  will  pass  between  fourteen  and 
seventeen  miles  of  Newchwang.  The  natural  fear 
of  the  merchant  of  Newchwang  is  that  the  whole 
of  the  Manchurian  trade  may  be  diverted  from 
Newchwang  to  Talienwan,  when  the  railway  is 

The  Russian  camp  at   Iching,  fourteen  miles 

from  Newchwang,  commands  all  the  roads. 
D  49 


For  report  on  this  railway,  see  chapter  on  "  Rail- 

This  railway  will  pass  through  Mukden,  and 
have  a  branch  line  to  Kirin,  and  will  tap  the  great 
bean-growing  districts  in  the  north  and  northwest; 
it  also  taps  the  large  coal-fields  in  the  neighbor- 
hood of  Liaoyang,  eighty  miles  north  by  east  of 
Newchwang  (Yingtzu) ;  and  if  it  can  get  hold  of 
the  bean  traffic,  which  now  comes  by  river,  the 
trade  of  Newchwang  would  suffer  very  consider- 
ably. With  the  short  branch  the  railway  can 
either  use  Newchwang  or  pass  it.  This  might 
kill  the  trade  of  Newchwang,  although  it  would 
still  be  an  open  port  under  treaty. 

However,  the  Chinese  Imperial  Railway,  which 
is  to  run  up  the  River  Liao  to  Sin-min-thun,  near 
Mukden,  from  Shanhaikwan  via  Kinchow,  should 
be  able  to  provide  the  competition  necessary  to 
prevent  monopoly. 

There  was  some  disagreement  between  Russian 
and  British  merchants  with  regard  to  the  owner- 
ship of  land  in  the  place  where  the  Russian  railway 
station  was  to  be  located. 

Some  British  merchants  offered  £\  a  mou 
(|th  of  an  acre)  more  for  the  land  than  the  Russians 
were  prepared  to  give.  The  Chinese  accepted  the 
British  offer,  and  the  land  became  British,  and  the 
title-deeds  were  registered  in  the  British  Consulate. 
Although  these  deeds  were  so  registered,  the 
Russians  declared  the  British  had  no  right  to  the 
land,  and  induced  the  Taotai,  the  Chinese  authori- 



ty,  to  refuse  to  recognize  the  sale.  A  serious  dis- 
pute was  avoided  by  the  promptitude  and  deter- 
mination of  Mr.  Allen,  the  British  Consul,  who 
went  to  the  Taotai's  Yamen  and  would  not  leave 
until  the  deeds  were  stamped. 

I  saw  land  that  had  been  taken  from  the  natives 
by  the  Russians  at  the  rate  of  ten  taels  per  mou. 
when  identical  land  marching  with  it  was  bought 
by  them  (the  Russians)  for  loo  taels  a  mou  be- 
cause it  belonged  to  foreigners. 

There  is  no  doubt  that  the  proceedings  of  the 
Russians  in  the  neighborhood  of  Newchwang 
have  been  of  a  very  high-handed  character.  They 
took  their  present  settlement  without  leave  from 
anybody,  and  paid  the  natives  at  nominal  rates  for 
the  land.  I  was  shown  where  the  railway  had  gone 
through  growing  crops  without  compensating  the 
natives,  who  were  greatly  incensed,  but  were  ad- 
vised to  keep  peaceful  by  the  authorities. 

I  have  mentioned  the  foregoing  instance  in  order 
to  add  my  personal  testimony  to  the  statement 
made  by  the  British  merchants  resident  in  New- 
chwang as  to  the  dominant  position  of  the  Rus- 
sians in  Manchuria. 

But  I  wish  it  most  emphatically  to  be  understood 
that  in  these  remarks,  or  in  any  remarks  I  may 
make  with  regard  to  the  present  position  of  Russia 
in  Manchuria,  I  merely  made  them  as  a  plain  state- 
ment of  fact,  and  with  no  aggravating  or  irritating 
intention.  My  views  may  be  pro- British;  they 
are  certainly  not  anti-Russian. 



It  would  be  ungenerous  of  me  if  I  were  not  to 
mention  here  the  extreme  kindness,  courtesy,  and 
civility  with  which  the  Russians  treated  me  at 

Dr.  Greig,  of  the  Manchurian  Protestant  Mis- 
sion, was  very  much  exercised  as  to  the  rights  of 
the  Protestant  Missions  in  Manchuria  and  their 
property.  These  missions  have  been  established 
thirty  years,  they  have  over  forty  European  agents 
in  Manchuria, and  about  10,000  native  Christians; 
they  have  valuable  properties  at  all  the  missions, 
including  school  and  hospital.  The  hospital  at 
Kirin  cost  ;^  1,600  to  build.  Dr.  Greig  declared 
that  both  himself  and  all  his  missions  looked  upon 
Manchuria  as  Russian  in  all  but  name.  He  showed 
that  under  the  Treaty  of  Tientsin,  and  by  special 
edict  of  the  Emperor  in  1 891,  his  missionaries 
had  a  right  to  reside  among  the  people,  to  teach 
the  Christian  religion  and  make  converts  and  carry 
on  medical  work  without  let  or  hindrance. 

Dr.  Greig  had  quite  lately  travelled  all  through 
Manchuria.  He  was  extremely  anxious  as  to  the 
future  position  of  himself  and  his  coadjutors  with 
regard  to  the  present  military  absorption  by  Russia 
of  Manchuria.  I  recommended  Dr.  Greig  to  refer 
the  matter  he  had  brought  to  my  notice  to  his 

Mr.  Sprent,  and  other  missionaries,  who  know 

the  whole  of  Manchuria  well,  informed  me  that  as 

late  as  June,  1897,  there  was  not  a  single  Russian 

at  Kirin.     At  the  date  when  I  was  at  Newchwang, 



November,  1898,  I  was  told  there  was  a  large  es- 
tablished camp. 

Mr.  Sprent  said  he  had  seen  parties  sent  out  to 
survey  the  mines  in  Manchuria.  He  believed  the 
parties  were  subsidized  by  the  Government. 

Since  the  end  of  1897  the  Russians  have  been 
pouring  troops  into  Manchuria ;  every  month  the 
numbers  are  increasing.  There  is  feverish  activity 
in  the  preparations  of  the  railway.  Under  these 
circumstances,  the  future  development  and  security 
of  Anglo-Saxon  trade  must  entirely  depend  upon 
the  good-will  of  the  Russians. 

It  is  only  necessary  to  read  the  agreements  rela- 
tive to  the  Russo- Manchurian  Railway  and  Port 
Arthur  and  Talienwan,  signed  by  M.  Pavloff  on 
behalf  of  the  Russian  Government,  and  Chang 
Yin-huan  and  Li  Hung  Chang  on  the  part  of  the 
Chinese  Government,  to  see  how  completely  and 
entirely  Russian  authority  is  dominant  in  Man- 
churia. These  papers  are  to  be  found  in  the  China 
Association  Report  for  1898. 

At  Newchwang,  and  generally  throughout  China, 
I  found  the  British  merchants  regarded  equality 
of  opportunity — or,  as  it  is  expressed,  the  policy 
of  the  "  Open  Door "  as  regards  Manchuria — as 
entirely  dependent  on  the  good-will  of  Russia. 

The  reason  they  advanced  was  the  interference 
of  Russia  with  a  purely  commercial  enterprise  con- 
nected with  the  Shanhaikwan  Railway,  in  which 
case  the  Russians  refused  to  allow  an  agreement 
made  betweep  a  British  corporation  and  the  Chi- 



nese  Government  to  be  ratified.  The  original 
agreement  was  relative  to  the  question  of  mort- 
gaging a  portion  of  the  railway  line  as  security 
for  capital  advanced,  to  build  the  whole  line  from 
Shanhaikwan  to  Kinchow  and  down  to  New- 

As  the  merchants  expressed  it,  the  Door  is  more 
effectually  closed  by  determined  interference  with 
purely  commercial  enterprises  than  it  would  be  by 
the  interposition  of  a  tariflf  or  preferential  rate. 

The  merchants  throughout  China  were  most 
determined  in  their  opinion  that,  though  Russia 
might  keep  the  door  open  in  Manchuria  until  the 
completion  of  the  Siberian  Railway,  the  immense 
military  preparations,  the  rapidity  with  which 
powerful  fortifications  are  being  pushed  on,  can 
have  but  one  meaning,  which  is,  that  when  Russia 
has  her  hold  on  Manchuria  strengthened,  prefer- 
ential rates  will  be  imposed  in  favor  of  Russian 

The  British  merchants  begged  of  me  to  impress 
as  forcibly  as  I  could  upon  the  Associated  Cham- 
bers of  Commerce  of  Great  Britian,  that  assur- 
ances with  regard  to  the  future  liberty  of  trade 
and  commerce  in  Manchuria  were  of  no  value 
whatever  under  present  circumstances,  where 
enormous  military  preparations  are  apparent  on 
one  side,  with  no  trade  to  protect  as  an  excuse  for 
such  preparations ;  while  on  the  other  side  there 
is  an  immense  and  increasing  trade,  with  no  pro- 
tection or  security  whatever. 



The  British  merchants  further  pointed  out  that 
if  Russia  openly  annexes  Manchuria,  Corea  is  cut 
off,  and  entirely  at  her  mercy.  Mongolia  would 
easily  be  absorbed,  and  the  great  horse-breeding 
ground  for  the  whole  of  China  with  it.  This 
would  give  Russia  control  over  the  hordes  of  ir- 
regular cavalry  that  have  before  now  overrun  the 
whole  of  China,  and  also  give  them  control  of  a 
hardy  and  stalwart  population  of  many  millions, 
that  only  need  to  be  drilled  and  disciplined  to 
make  as  fine  soldiers  as  any  in  the  world.  They 
also  pointed  out  that  if  Russia  were  once  in  this 
position  there  would  be  nothing  to  prevent  her 
sweeping  down  from  the  north  of  China  to  the 
centre,  and  from  the  centre  to  India,  thus  paralyz- 
ing British  trade  and  commerce.  They  further 
expressed  a  hope  that  the  powerful  Associated 
Chambers  of  Commerce  would  demand  from  the 
British  Government  where  the  line  was  to  be 
drawn  of  Russia's  advance  to  the  south ;  and, 
further,  what  steps  are  going  to  be  taken  to  keep 
that  line  intact. 

As  Newchwang  is  the  key  of  the  position  with 
regard  to  the  question  of  the  Open  Door  in  the 
future,  and  as  fears  are  expressed  as  to  the  ulti- 
mate  intentions  of  Russia,  I  have  entered  very  fully 
into  a  detailed  trade  report  connected  with  that 

The  settlement  at  Newchwang  (Yingkow)  lies 
on  the  south  bank  of  the  Liao  River,  and  is  dis- 
tant about  fifteen  miles  from  the  river's  mouth. 



From  the  end  of  November  to  the  end  of  March, 
navigation  is  entirely  stopped  owing  to  the  river 
being  frozen  over,  the  ice  being  from  seventeen  to 
nineteen  inches  in  thickness,  and  admitting  of 
heavily  laden  carts  crossing  over  it. 

The  trade  of  Newchwang  is  almost  entirely  in 
native  hands,  the  foreign  merchants  being  no  more 
than  agents  for  the  Chinese.  The  American  Trad- 
ing Company  is  the  only  firm  which  actually  im- 
ports goods  on  its  own  account.  There  are  three 
British  firms ;  but  these  are  chiefly  or  (it  may  be 
said)  wholly  engaged  in  shipping  business.  Dur- 
ing the  last  ten  years  the  trade  has  been  steadily 
increasing,  and  the  figures  published  annually  by 
the  Customs  show  the  immense  importance  of 
Newchwang  as  a  port  of  commerce. 

During  1895,  Newchwang  was  in  the  hands  of 
the  Japanese,  and  the  value,  therefore,  of  the  trade 
in  that  year  need  not  be  taken  into  account ;  but 
in  1896  the  value  of  the  trade  was  over  22,000,000 
taels,  and  in  1897  i*  exceeded  26,000,000,  showing 
in  one  year  an  increase  of  over  4,000,000  teals 
(about  ;^5 70,000).  In  1887  the  revenue  collected 
was  405,000  teals,  while  ten  years  later  it  exceeded 
568,000  teals,  showing  a  gain  of  over  40  per  cent, 
when  comparing  the  figures  of  1897  with  those  of 
1887.  The  revenue  collected  in  1897  was  in  ex- 
cess of  all  previous  years,  with  the  exception  of 
1 89 1,  when  the  collection  exceeded  583,000  taels. 
But  while  in  1891  the  collection  was  over  28,000 
taels  on  Foreign  Opium,  the  receipts  under  this 



head  in  1897  were  just  over  3,cxx)  taels,  showing 
that,  notwithstanding  the  almost  total  disappear- 
ance of  Foreign  Drug  from  Newchwang  trade,  the 
receipts  from  miscellaneous  goods  have  steadily 


The  trade  with  foreign  countries  is  confined  to 
Hong  Kong,  Japan,  and  Russian  Manchuria. 

The  only  article  imported  from  the  latter  coun- 
try is  sea-weed,  which  is  used  as  a  vegetable  by  the 
Chinese.  The  quantity  imported  has  not  varied 
for  many  years.  The  trade  with  Hong  Kong  has 
increased  enormously.  In  1891,  from  that  colony 
goods  to  the  value  of  304,000  taels  were  obtained, 
while  in  1897  ^^^  value  had  increased  to  1,238,000 
taels,  showing  an  advance  of  no  less  than  307  per 

Formerly  Indian  cotton  yarn  reached  this  port 
via  Shanghai;  now  it  comes  direct  from  Hong 
Kong,  a  fact  which  will  account  largely  for  the 

The  chief  items  which  are  imported  from  Hong 
Kong  are  cotton  yarn,  sugar,  and  old  iron. 

Japan  is  advancing  fast,  the  value  of  the  im- 
ports reaching  280,000  taels  in  1897,  while  in  1891 
it  was  only  22,000  taels.  The  principal  articles 
imported  from  Japan  are  cotton  yarn  and  matches, 
and  the  value  of  these  in  1897  was  as  under: 

Cotton  yam 8,000  piculs. 

Matches 224,000  gross. 



The  greater  part  of  the  Newchwang  foreign 
trade  is  carried  on  through  Shanghai. 


The  principal  items  are  American  drills,  Ameri- 
can and  Indian  sheetings,  gray  and  white  shirtings, 
and  cotton  lastings.  Of  late  years,  English-made 
goods  have  been  losing  ground,  while  American 
have  been  advancing: 

American  drills,  1893 

"            "  1897 

"    sheetings,  1893 

"           "  1897 

English  drills,  1893 

"         "  1897 

"     sheetings,  1893 

"            "  1897 

100,000  pieces. 


Shanghai-manufactured  goods  are  also  finding 
a  market  here,  11,000  pieces  having  been  im- 
ported during  1897.  Cotton  yarn  was  first  im- 
ported in  1882,  120  piculs  finding  its  way  into  the 
port.  Of  this  quantity,  however,  24  piculs  did  not 
find  a  market  here,  and  had  eventually  to  be  re- 
exported. In  1888  no  less  than  48,000  piculs  were 
imported,  the  bulk  of  it  being  English-made  yarn. 

Latterly  English  yarn  has  receded  and  Indian 
yarn  has  come  to  the  front.  During  1897  the 
importation  of  yarn  reached  164,000  piculs,  over 
140,000  of  which  was  Indian  yarn.  From  Japan 
about  18,000  piculs  were  received,  and  of  Shanghai- 



manufactured  yarn  there  were  imported  4500 
piculs.  There  were,  however,  only  700  piculs  of 
English  yarn  imported. 


These  are  of  little  importance  in  the  trade  of 
this  port,  the  poor  natives  using  wadded  clothes 
during  the  cold  season,  and  the  rich,  fur  clothing, 
furs  being  comparatively  cheap. 


The  only  metals  worth  mentioning  are  nail-rod 
iron  and  bar  iron.  During  1897  28,000  piculs  of 
the  former  and  5500  piculs  of  the  latter  were  im- 
ported. A  large  quantity  of  old  iron  is  imported, 
and  is  used  chiefly  for  making  junk  anchors,  horse- 
shoes, etc. 


A  large  quantity  of  both  American  and  Russian 
kerosene  enters  the  port  each  year,  the  American 
oil  finding  much  more  favor  than  the  Russian.  In 
1896,  527,000  gallons  of  American  were  imported, 
while  in  1887  the  quantity  exceeded  2,000,000 
gallons.  During  1897,  15,000  gallons  of  oil  were 
imported  into  the  port  direct  from  Japan,  the  oil 
being  entered  in  the  Customs  Returns  as  Japanese 
oil.  The  Russian  oil  does  not  compare  in  any  re- 
spect with  the  American  oil ;  but  to  make  its  sale 



practicable,  Chinese  often  transfer  the  Batoum  oil 
to  cases  which  have  contained  American  oil,  and 
thus  many  are  led  to  suppose  that  when  they  have 
bought  a  case  of  oil  with  the  word  "  Devoc  "  on  it 
they  have  obtained  the  genuine  article. 


The  staple  exports  are  beans,  bean -cake,  and 
bean  oil.  The  other  items  on  the  export  list  are 
felt,  deer-horns,  ginseng,  skins,  and  wild  raw  silk. 
Deer-horns  and  ginseng  are  highly  prized  by  the 
natives  for  their  medicinal  properties,  and  fancy 
prices  are  accordingly  paid  for  them.  The  in- 
crease in  the  export  of  wild  raw  silk  merits  notice. 
Ten  years  ago — that  is,  in  1887 — the  export  of  this 
article  was  valued  at  647,000  taels,  while  last  year 
its  value  was  1,374,000  taels,  showing  an  advance 
of  no  less  than  112  per  cent.  Until  recent  years 
the  bulk  of  the  beans  and  bean-cake  trade  was 
carried  on  with  the  south  of  China ;  but  since  the 
Chino-Japanese  war  an  extensive  trade  has  been 
carried  on  with  Japan  ;  in  fact,  Japan  has  out- 
stripped China  altogether,  as  the  following  figures 
will  show: 

1891  1897 

Exports  to  Japan      .     .         460,000  taels.     5,079,000  taels 

(about  ;^7 00,000). 
"       "   Swatow  .     .     2,727,000      "       2,438,000  taels 

(about  ;£^34o,ooo). 
"       "   Canton  .     .      1,751,000      "        2,338,000  taels 

(about  ;^334,o3o). 


Beans  are  sent  to  Hong  Kong  and  Canton  for 
food,  and  bean-cake  is  sent  to  Swatow  for  manure. 


The  foreign  product  has  almost  disappeared 
from  the  list  of  imports,  the  native  drug  being 
extensively  cultivated  all  over  Manchuria. 


The  mountains  in  Manchuria  are  reputed  to  be 
rich  in  minerals.  Copper  and  lead  have  been 
found,  and  iron -mines  exist  in  the  vicinity  of 
the  coal-mines  near  Liaoyang. 

The  demand,  however,  for  the  iron  produced  is 
on  the  wane,  owing  to  the  cheapness  of  the  foreign 
article.  Coal  is  mined  in  a  very  primitive  way,  as 
the  Chinese  have  no  efficient  pumping  gear,  and 
thus  the  water  stops  operations  after  a  certain 
depth  has  been  reached.  There  being  no  water- 
way  near  the  mines,  and  the  roads  being  very  bad, 
there  is  little  business  done  during  the  summer, 
but  in  the  winter,  when  the  roads  are  good,  bus- 
iness is  brisk,  and  as  many  as  two  to  three  hundred 
carts— each  cart  carrying  one  ton  and  a  half — are 
employed  every  day  in  carrying  coal  away  from 
the  mines.  Some  of  the  coal  reaches  the  port — 
for  foreign  use  only — the  bulk,  however,  is  used 
by  natives  in  Liaoyang,  or  round  about  Mukden. 

The  coal  costs  about  14^.  a  ton  at  the  pit's  mouth. 



By  the  time,  however,  that  it  reaches  the  port 
its  cost  is  nearly  doubled.  There  are  also  several 
coal-mines  near  Kirin,  the  coal  from  which  is  used 
by  the  large  arsenal  which  has  been  established 


This  mineral  is  found  in  many  of  the  valleys  in 
Central  and  Northern  Manchuria,  the  principal 
valley  being  that  through  which  the  Moho  (a  trib- 
utary of  the  Amoor)  runs.  The  gold  is  obtained 
by  the  washing  process.  The  Moho  Mining  Com- 
pany, who  are  exploiting  the  country,  have  also 
some  stamping  machinery,  and  appear  to  be  doing 
a  large  business.  The  value  of  the  gold  exported 
in  1897  was  2,029,000  taels  (nearly  ;^300,ooo). 
When  the  country  is  opened  up  and  developed, 
mining  will  be  worked  on  European  lines,  and 
thus  in  course  of  time  we  may  expect  to  find  that 
Manchuria  is  rich  in  gold. 


There  is  a  silver-mine  about  sixty  miles  to  the 
west  of  Hunch'un,  where  foreign  machinery  is 
employed  in  mining  operations ;  but  no  informal 
tion  can  be  procured  respecting  the  mine. 


An  extensive  trade  is  done  in  bristles,  the  value 

of  which  during    1897   was   36,000  taels   (about 



;^500o).  A  fact  worthy  of  note  is  that  the  trade 
in  bristles  was  started  by  a  Protestant  missionary, 
who  wanted  to  find  employment  for  his  converts. 
The  bristles  are  sent  from  here  to  Shanghai,  and 
are  thence  exported  to  England  and  other  foreign 


In  1868,  a  steam  bean-mill  was  started  here; 
but,  owing  to  native  opposition,  it  was  not  allowed 
to  work,  and  thus  the  experiment  came  to  an  end. 
In  1896  Messrs.  Butterfield  &  Swire  erected  a 
bean-mill,  and  with  satisfactory  results,  the  profit 
accruing  from  the  making  of  bean-cake  in  this  way 
being  enormous.  The  mill  is  worked  by  Chinese 
only,  and  is  practically  Chinese-owned. 

Other  mills  are  shortly  to  be  erected,  and  their 
erection  will  greatly  enhance  the  importance  of 
Newchwang  as  an  open  port. 


It  is  somewhat  too  early  to  review  the  trade  of 
the  present  year,  as  the  figures  for  the  year  have 
yet  to  be  summarized  and  examined ;  but  it  may 
be  fairly  said  to  have  been  a  year  of  great  com- 
mercial activity,  and  its  results  will  no  doubt  show 
an  increase  over  1897.  The  port  did  not  open 
until  the  first  week  in  April,  and  thus  there  was  no 
trade  at  all  to  chronicle  for  the  first  quarter  of  the 

year.     In  spite  of  this  fact,  however,  favorable  re- 



suits,  as  remarked  above,  may  be  looked  for.  Most 
noticeable  in  the  trade  was  the  enormous  demand 
which  came  from  Japan  for  Manchurian  produce. 
Instead  of  British  vessels  coming  in  from  Chinese 
ports  to  load  for  Chinese  ports,  Japanese  vessels 
arrived  from  Japanese  ports  and  loaded  beans  and 
bean-cake  for  Japan  again. 

The  market  was  completely  drained  of  the  staple 
commodities,  and  prices  went  up  to  fabulous  fig- 
ures. It  is  not,  however,  unlikely  that  the  ship- 
ments to  Japan  exceeded  the  quantity  required, 
and  that  losses  may  accrue  at  the  end  of  the  year. 

The  year  will  be  a  notable  one  in  the  annals  of 
Newchwang,  as  being  the  year  in  which  the  railway 
to  connect  the  port  with  Mukden  in  the  north, 
and  with  Talienwan  in  the  south,  was  started. 
The  Russians  have  the  railway  entirely  in  their 
own  hands,  notwithstanding  the  fact  that  the 
undertaking  is  styled  the  "  Eastern  Chinese  Rail- 
way." So  far,  only  sleepers  and  part  of  the  rails 
had  arrived;  but  the  rolling  stock  was  expected 
in  the  course  of  a  few  days,  and  the  line  as  far  as 
Haiching  should  be  opened  in  the  spring  of  1899. 


The  estimated  population  is  32,876 


The  total  value  of  trade  in  1897  was  Hk.  Taels  22,051,976 
(over  ;^3, 100,000). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  2,385,301,  of  which  1,327,559  was  British. 

I  PAID  two  visits  to  Chefoo,  the  first  on  October 
13th,  and  the  second  on  November  9th. 

The  British  merchants  at  this  place  handed  me 
the  following  memorandum : 

"Chefoo,  October  15, 1898. 

"My  Lord, — We  take  the  liberty  of  addressing  you  with 
regard  to  the  prospects  of  trade  at  this  port,  and  solicit  your 
great  influence  on  behalf  of  vested  British  and  other  interests 
which  are  threatened  here ;  the  opening  of  Kiao-chow  with  the 
prospective  railways  and  alleged  sole  right  of  German  control 
in  the  claimed  sphere  of  influence,  which  embraces  nearly  the 
whole  province,  being  likely  to  have  a  very  adverse  effect  on 
the  port  generally. 

"  Shipping.— The  tonnage  entered  and  cleared  last  year 
amounted  to  2,385.301  tons,  of  which  about  56  per  cent,  was 
imder  the  British  flag,  and  we  may  mention  that  after  Shang- 

E  65 


haiy  this  place  claims  to  be  the  second  in  this  Empire  for  the 
amount  of  sea -going  tonnage  visiting  the  port.  The  total 
annual  value  of  the  trade  amounts  to  nearly  ;^3,ooo,ooo 

"Cotton  Goods. — ^There  is  a  vast  field  for  development 
in  this  direction,  the  high  price  of  transport  throughout  the 
province  enhancing  the  cost  so  much  that  foreign  cottons  are 
practically  placed  beyond  the  reach  of  the  poorer  classes  of 
the  province,  the  population  of  which  is  about  30,000,000. 

"  There  are  valuable  gold  and  coal  mines  in  the  province, 
and  if  only  concessions  could  be  obtained  to  work  these,  the 
result  would  be  a  great  boon  to  commerce  generally  and 
would  create  a  demand  for  machinery  of  all  descriptions. 

"  The  recent  opening  of  inland  waterways  will  be  a  valu- 
able help,  as,  under  the  regulations,  foreign-built  steamers  are 
now  allowed  to  trade  to  any  of  the  subsidiary  coast  ports, 
but  there  are  no  navigable  rivers  in  the  province,  and  unless 
some  cheap  inland  means  of  transport  can  be  devised,  the 
trade  of  the  port  is  bound  to  suffer.  Nearly  the  whole  of  the 
traffic  from  this  port  is  carried  on  by  pack-mules,  which  is 
not  only  slow  and  very  expensive,  but  likewise  injurious  to 
the  cargo  carried. 

"We  would  suggest  thai  a  concession  be  obtained  for  a 
railway  to  run  from  Wei-hai-Wei  and  Chef 00  to  Che-nan-foo, 
with  a  loop-line  branching  from  Chefoo  via  Lai- Yang,  and 
joining  the  main-line  at,  say,  Wei-hien.  The  traffic,  we  are 
confident,  would  be  immense,  and  the  benefit  to  trade  general- 
ly could  not  be  overestimated.  If  this  could  be  put  in  hand 
promptly,  any  adverse  infiuence  that  might  accrue  from  the 
opening  of  Kiao-chow  would  be  counteracted. 

"  We  would  further  ask  that  our  Consuls  be  strongly  urged 
to  look  after  British  interests,  and  adopt  the  same  policy 
as  is  taken  up  by  foreign  Consuls,  whose  eagerness  to  for- 
ward the  interests  of  their  nationals  is  in  strong  contrast  to 
the  apathy  displayed  by  most  of  our  Consuls  in  China. 

"  Trusting  that  you  will  use  your  great  influence  on  behalf 
of  the  matters  above  alluded  to, 



"  We  have  the  honor  to  be,  my  Lord,  your  Lordship's  most 
obedient  servants, 

*'  A.  M.  ECKFORD. 

"  P.  F.  Lavers. 
"  E.  E.  Clark. 
"  Henry  J.  Clark. 
"  J.  P.  Wake. 
"  A.  J.  Cooper. 
"  T.  A.  Cooper. 
"  J.  Silverthone. 
"  Jas.  McMullan. 
"  A.  L.  R.  Donnelly. 
"  C.  Ornabe  &  Co. 
**  Fergusson  &  Co. 
'^Gardner  &  Co. 
"  T,  M.  Armstrong. 
''  A.  Parkhill. 
''  The  Right  Honorable 

"  Lord  Charles  Beresf ord, 
"  Peking." 

I  think,  perhaps,  the  merchants  were  unneces- 
sarily alarmed  as  to  the  position  the  Germans  have 
assumed  at  Kiao-chow.  A  country  generally 
works  with  due  regard  to  its  own  interests,  and  it 
certainly  would  not  be  to  the  interest  of  German 
trade,  as  a  whole  throughout  China,  if  she  eventu- 
ally carries  out  a  policy  of  exclusiveness  in  the 
province  of  Shantung. 

Kiao-chow  has  been  declared  an  open  port,  and 

when  the  proposed  German  railway  to  Tsinan  is 

finished,  development  of  trade  in  that  part  of  China 

is  certain  to  follow,  and  though  it  might,  under 

some  reftiote  contingencies,  inflict  damage  to  the 



port  of  Chefoo,  still  it  is  certain  to  increase  the 
volume  of  trade  in  China,  which  will  benefit  the 
trade  of  all  nations,  but  particularly  that  of  the 
British.  With  reference  to  the  concession  which 
the  merchants  suggested  should  be  obtained,  I  in- 
formed them  that  I  did  not  think  there  would  be 
the  slightest  difficulty  if  a  responsible  company 
made  application  through  the  British  Minister,  as 
since  his  appointment  Sir  Claude  MacDonald  had 
given  his  support  to  every  application  of  a  bona 
Ade  nature.  I  further  said  that  the  clause  in  the 
memorandum  referring  to  "the  adverse  influence 
that  might  accrue  from  the  opening  of  Kiao-chow  " 
did  not  express  the  line  of  policy  which  was  unani- 
mously declared  to  be  the  best  for  Anglo-Saxon 
trade — t.e.,  the  "  Open  Door "  policy  and  equal 
opportunity  for  all  nations,  and  that  Great  Britain 
could  not  expect  to  have  everything,  and  as  long 
as  the  "Open  Door"  policy  was  the  policy  in 
force  in  China,  British  merchants  ought  to  view 
with  satisfaction  the  efforts  of  other  countries  to 
open  up  China,  and  so  increase  the  volume  of 

I  made  some  inquiries  about  the  resources  of 
the  Province. 

There  is  a  gold-mine  at  Chou  Yuan,  sixty  miles 
from  Chefoo,  which  now  employs  one  thousand 
men  working  for  Chinese  with  Chinese  capital. 
The  most  primitive  methods  are  used  for  extract- 
ing ore. 

There  is  another  gold-mine  at  a  place  called 



Phing-tu  worked  in  the  same  manner.     I  could 
get  no  particulars  about  it. 

It  is  one  of  the  few  provinces  in  China  where 
the  waterways  are  not  navigable,  and,  therefore, 
railways  will  be  a  paying  interest  as  soon  as  com- 
pleted. All  merchandise  is  carried  on  mules,  or 
by  coolies. 

The  merchants  here  declared  their  trade  was  . 
suffering  through  want  of  security  and  general 
uneasiness  caused  by  the  recent  position  taken  by 
Russia  in  the  North. 

I  found  an  interesting  illustration  here  of  the 
methods  lately  employed  towards  the  Chinese 
Government,  which  I  can  only  describe  as  un- 
chivalrous  and  unmanly  to  a  Government  and 
country  in  its  helpless  condition. 

A  Mr.  Fergusson,  a  British  subject,  bought  a 
property  which  included  the  right  of  pre-emption 
to  the  foreshore,  although  the  foreshore  belonged 
to  the  Chinese  Government. 

The  Chinese  were  induced  to  sell  the  foreshore 
to  a  Russian  Company.  Instead  of  arguing  out 
the  point  in  a  friendly  manner  with  the  Russian 
Government,  the  British  Government  insisted  on 
the  Chinese  paying  30,ocx)  taels  (over  ;^40oo)  for 
granting  a  concession,  which,  owing  to  their  weak- 
ness, they  were  powerless  to  refuse. 

The  merchants  here  begged  me  to  bring  to  the 
notice  of  the  Associated  Chambers  the  importance 
of  getting  a  concession  from  the  Chinese  Govern- 
ment for  permission  to  have  right  of  residence  in 



the  interior  of  China.  They  declared  that  without 
such  right  It  was  useless  to  think  that  British  trade 
and  commerce  could  be  materially  developed  in 
the  future. 

I  visited  one  of  the  silk  filatures.  About  one 
thousand  hands  were  employed  here,  mostly  chil- 

The  machinery  of  the  plant  was  all  modern, 
made  in  Germany,  and  very  good.  The  capital 
and  the  direction  were  Chinese.  I  was  told  by  the 
Chinese  that  it  paid  very  well. 

I  also  visited  a  bean-factory  for  pressing  the  oil 
out  of  the  beans ;  it  was  the  most  primitive  process 
conceivable.  The  beans  were  placed  in  receptacles 
made  of  grass,  which  in  their  turn  were  put  into 
perforated  iron  vessels.  The  pressure  was  pro- 
duced by  wedges,  driven  home  with  slung  stones, 
the  bearings  being  solid  trees  with  the  heart  cut 
out  to  make  a  guide.  ( 

The  Chinese  have  generally  set  their  faces 
against  machinery  for  this  industry.  Messrs.  Jar- 
dine  &  Matheson  have  imported  machinery  which 
would  carry  out  the  work  far  cheaper  and  better, 
but  I  was  told  the  Chinese  merchants  had  boy- 
cotted both  the  bean-cake  and  the  oil,  and  that 
the  mill  had  to  be  closed. 

While  here  I  visited  and  thoroughly  examined 
one  of  the  three  cruisers,  sister-ships,  lately  come 
from  Germany,  lying  in  the  roads.  ( Vide  chapter 
"  Armies  and  Navies.") 



The  estimated  population  is  4000 

As  the  utility  of  this  place  for  the  protection  of 
Anglo-Saxon  trade  and  commerce  has  been  much 
called  in  question,  perhaps  an  opinion  of  it  from  a 
naval  officer  may  be  of  interest. 

Messrs.  Butterfield  &  Swire  kindly  placed  a 
steamer  at  my  disposal  in  order  that  I  might  visit 
this  place. 

I  consider  it  an  immense  acquisition  to  our  naval 
strength  in  the  China  Seas,  as  with  but  a  compara- 
tively small  expenditure  of  money  it  could  be  made 
a  most  efficient  and  powerful  naval  base. 

There  are  three  camps,  which  were  formerly  oc- 
cupied by  the  Japanese,  on  the  main-land  in  excel- 
lent order.  The  island  could  be  fortified  at  small 
expense,  and  it  would  be  unnecessary  to  fortify  any 
point  on  the  main-land,  except  perhaps  one  posi- 
tion which  commands  the  western  entrance.  The 
old  emplacements  on  the  island  and  at  the  position 
referred  to  are  in  good  order.  All  that  is  wanted 
is  that  the  guns  be  placed  in  position. 

At  this  moment  there  is  noplace  in  Chinese  waters 
where  battleships  can  anchor  so  close  to  the  shore. 



At  present,  Wei-hai-Wei  is  in  no  way  to  be  com- 
pared in  power  to  Port  Arthur,  only  eighty  miles 
off,  at  which  place  seventy  guns  have  been  mounted 
since  it  passed  into  the  possession  of  the  Russians, 
while  not  a  single  gun  has  as  yet  been  mounted  at 

It  is  an  easy  place  for  shipping  to  make,  and 
with  some  dredging  and  wharfing  might  become  by 
far  the  finest  and  safest  harbor  in  the  North  of  China, 

Mercantile  steamers  could  load  and  unload  safely 
to  leeward  of  the  island  at  any  time  or  in  any  wind, 
though  at  present  there  is  no  breakwater,  but  as 
the  British  have  consented  to  close  the  door,  as  far 
as  railway  facilities  are  concerned,  it  is  unlikely 
that  Wei-hai-Wei  can  ever  become  a  great  mercan- 
tile port. 

One  steamer,  the  Hanchow,  was  fourteen  days 
loading  1800  tons  of  cargo  in  a  northern  port. 

Another  steamer  took  forty-eight  hours  to  dis- 
charge  100  tons  of  cargo,  owing  to  the  swell  at  this 
same  northern  port.  Such  delays  are  very  fre- 
quent, owing  to  continual  rough  weather. 

I  found  the  people  at  Wei-hai-Wei  very  friendly 
to  the  British. 

The  island  is  two-thirds  the  size  of  Gibraltar. 
It  is  the  best  place  in  China  to  build  a  sanatorium 
for  the  fleet. 

In  the  event  of  the  British  desiring  to  help  the 

Chinese  to  organize   their   defensive   forces,  this 

place  would  be  most  suitable  for  commencing  to 

train  them,  whether  naval  or  military. 




I  RECEIVED  an  invitation  from  Rear-Admiral 
H.R.H.  Prince  Henry  of  Prussia  to  visit  Kiao- 
chow.  Messrs.  Jardine  &  Matheson  kindly  placed 
a  steamer  at  my  disposal  for  this  purpose,  and  I 
put  into  that  port  14th  November,  1898,  on  my 
way  from  Chefoo  to  Shanghai.  This  place  would 
have  great  capabilities  as  a  mercantile  port  in  the 
future,  provided  very  large  sums  of  money  are 
spent  upon  it.  A  breakwater  will  have  to  be 
built  in  order  to  make  it  a  good  anchorage  and 
to  defend  it  from  easterly  seas,  and  the  inside  har- 
bor will  have  to  be  extensively  dredged  in  order  to 
give  sufficient  water. 

It  is  not  an  easy  place  for  vessels  to  make,  par- 
ticularly in  foggy  weather. 

When  the  railway  is  finished  from  Kiao-chow  to 
Tsinan,  Kiao-chow  is  certain  to  become  a  mercan- 
tile port. 

Some  fears  were  expressed  by  the  merchants  at 
Tientsin  and  Chefoo  that  when  Kiao-chow  became 
a  mercantile  port  the  shipping  industries  of  those 
places  would  suffer.  I  assured  them  that,  in  my 
opinion,  if  the  policy  of  the  Open  Door  was  main- 



tained  while  railways  developed  the  latest  resources 
of  China,  there  would  be  ample  room  for  more 
mercantile  ports,  and  I  also  pointed  out  to  them 
that  if  other  nations  help  by  building  railways  to 
develop  China  the  volume  of  trade  as  a  whole 
would  be  certain  to  increase,  and  with  equal  oppor- 
tunities  the  Anglo-Saxon  merchants  must  benefit. 

The  Anglo-Saxon  merchant,  however,  need  not 
fear  much  competition  from  Kiao-chow  if  the  reg- 
ulations as  to  land  remain  as  they  were  when  I 
visited  that  place. 

The  Government  owns  the  land.  If  it  is  bought 
by  private  individuals  or  firms,  all  sales  by  auction 
or  otherwise  have  to  be  registered.  Six  per  cent, 
is  charged  on  the  assessed  value  of  the  land,  and 
it  is  to  be  reassessed  every  twenty-five  years  for 
the  above  tax. 

If  the  land  is  sold  at  a  profit  at  any  time,  one- 
third  of  that  profit  is  to  go  to  the  Government. 
The  Government  claims  the  right,  as  a  safeguard 
against  fraud,  to  take  over  any  piece  of  land  them- 
selves at  the  price  stated  by  the  seller  and  pur- 
chaser to  be  the  selling  price. 

To  explain :  If  two  men  come  to  register  a  sale, 
one  to  the  other,  for  a  piece  of  land  at  $10,000,  the 
Government  can  say  to  the  seller,  "  Here  is  your 
$10,000,  less  the  one-third  profit  on  what  you 
originally  expended,"  and  the  intending  purchaser 
thus  loses  his  bargain. 

The  Germans  were  very  actively  employed  on 
shore  clearing  the  ground,  building  barracks,  mak- 



ing  parade-grounds,  and  preparing  emplacements 
for  guns  in  the  most  commanding  positions.  The 
place  could  be  made  into  a  very  strong  naval  base, 
but  this  would  entail  a  further  large  expenditure 
of  money,  owing  to  its  configuration. 



The  estimated  population  is  405,000 


The  total  value  of  trade  in  1897  ^^s  Hk.  taels  101,832,962 
(over  ;f  14,500,000). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  7)969,674,  of  which  4,591,851  was  British. 

I  PAID  four  visits  to  Shanghai,  arriving  there 
the  first  time  on  October  4th. 

Shanghai  is,  perhaps,  the  most  important  Treaty 
port  in  the  Far  East  for  the  Anglo-Saxon  trader. 
It  is  situated  at  the  entrance  of  the  great  Yangtse 
Valley,  and  from  the  above  returns  it  will  be  seen 
that  British  trade  is  largely  predominant. 

The  British  merchants  here  were  much  inter- 
ested in  the  Mission,  and  resolved  to  afford  the 
Associated  Chambers  of  Commerce  every  informa- 
tion in  their  power.  They  expressed  grave  anx- 
iety as  to  the  future,  principally  based  upon  the 
want  of  security  in  the  provinces,  the  Chinese  Gov- 
ernment having  no  efficient  police  or  military  in 
case  of  disturbances.     Rebellion,  they  said,  was 

active  in  the  province  of  Szechuan,  and  disturb- 



ances  had  already  occurred  in  Hunan,  in  the 
Yangtse  Valley,  owing  to  which  the  Chinese  mer- 
chants were  refusing  to  trade  with  those  provinces. 
They  represented  that  this  would  prejudice  Brit- 
ish trade  in  the  near  future.  The  British  mer- 
chants also  referred  to  the  dominant  military 
position  of  Russia  in  the  North,  which,  they  said, 
must  ultimately  endanger  British  trade  unless 
some  e£fective  counterpoise  was  created  to  bal- 
ance it. 

It  was  again  brought  to  my  notice  that  the 
new  navigation  laws,  which  should  facilitate  Anglo- 
Saxon  trade,  can  only  partially  carry  out  their  in- 
tended benefits  owing  to  the  uncertainty  which 
exists  as  to  dues,  particularly  likin  and  loti-shui. 
Also  that  a  steamer  under  these  regulations  can 
only  carry  cargo  within  the  area  of  the  port  at 
which  she  is  registered;  she  cannot  trade  to  or 
pass  any  locality  where  there  is  a  Customs  House. 

Such  regulations  are  prohibitory  for  cargo  traffic, 
and  the  steamers  virtually  carry  nothing  but  pas- 

An  ocean-going  cargo-boat  can  trade  all  along 
the  rivers  and  pass  Customs  Houses,  but  boats 
that  are  under  the  new  inland  navigation  rules  are 
not  permitted  to  do  this. 

To  these  disadvantages  must  be  added  the  re- 
fusal of  the  Chinese  authorities  to  sanction  the  for- 
eigners' right  of  residence  outside  the  Treaty  ports. 

In  support  of  the  view  taken  by  the  British 
merchants  as  to  their  position  here,  the  Viceroys 



Liu  Kwen  Yi  (Nanking)  and  Chang  Chi  Tung 
(Hankow)  both  expressed  to  me  that  they  were 
sure  there  would  be  disturbances  in  their  provinces. 
( Vide  chapters  on  "  Nanking "  and  "  Hankow.") 
They  pointed  out  that  seven  coUectorates  of  the 
likin  in  their  provinces  (;^750,cx)o)  were  allocated 
to  pay  the  interest  of  the  ;^  1 6,cxx5,oc)0  borrowed  on 
the  8th  of  March,  i898,from  England  and  Germany. 
The  Viceroy  of  Nanking  further  stated  that  the 
whole  of  the  additional  increase  of  the  salaries  of 
the  Customs  House  officials — viz.,  ;^  187,500— has 
been  levied  on  the  Shanghai  Customs  House  alone. 
Both  Viceroys  declared  that  the  people  were  com- 
plaining that  their  taxation  was  being  paid  to  the 
foreigner,  and  that  it  was  impossible  to  levy  further 
taxes,  so  that  the  future  looked  very  gloomy. 
They  appeared  to  welcome  the  idea  of  British 
gunboats  on  the  Yangtse,  provided  they  were  sent 
to  assist  the  Viceroys,  and  not  to  undermine  their 

On  October  6th  I  met  a  deputation  of  the  China 
Association  at  Shanghai,  who  presented  me  with 
a  memorandum  couched  in  strong  and  definite 
terms.  In  the  discussion  which  followed,  the  mem- 
bers gave  it  as  their  opinion  that  there  was  a  gen- 
eral feeling  in  Shanghai  that  the  Home  Govern- 
ment did  not  support  British  interests  properly, 
and  that  their  views  and  opinions  were  shelved 
and  not  attended  to  for  years  at  a  time.  They 
thought  the  moment  had  come  for  a  change  of 

policy.     The  memorandum  is  as  follows  : 



''  In  view  of  the  interest  which  is  now  aroused  at  home  in 
matters  relating  to  China,  it  appears  to  the  Committee  of  this 
branch  of  the  Association  that  the  opportunity  is  favorable  for 
the  publication  of  some  general  expression  of  its  views  upon 
the  question. 

"There  has,  in  the  past,  been  general  complaint  of  the 
want  of  expansive  vitality  in  our  trade  with  China — a  com- 
plaint which  has  nowhere  been  more  freely  voiced  than  in 
China  itself  by  those  actively  engaged  in  the  commerce  of 
the  country.  In  many  quarters,  moreover,  it  has  been  alleged 
that  the  fault  lay  with  the  British  trader  himself.  It  is  not 
the  object  of  this  memorandum  to  undertake  the  defence  of 
this  charge,  but  it  is  merely  desired  to  put  forward  some  state- 
ments of  what  we  believe  to  be  the  main  reasons  for  the  com- 
parative absence  of  progressiveness  of  foreign  trade  with 
China.  The  opportunities  of  the  country  we,  better  probably 
than  any  one  else,  know  ought  to  be  enormous,  whether  in  the 
development  of  existing  trade  or  pushed  into  the  hitherto  un- 
exploited  field  of  China's  natural  wealth. 

*'  We  unhesitatingly  attribute  the  limited  expansion  of  trade 
with  China  to  three  main  reasons — namely: 

(a)  The  entire  absence  of  good  faith  on  the  part  of 
China  in  the  matter  of  her  Treaty  obligations. 

(6)  The  absence  of  security  for  the  investment  of 
foreign  capital  in  China  anywhere  outside  the  Treaty 

(c)  The  general   apathy    and   want   of  knowledge 
which  have  been  displayed  at  home  regarding  Chinese 
"Reasons  (a)  and  (H)  hinge  on  each  other,  and  reason 
(c)  supplies  the  explanation  of  the  other  two. 

"To  residents  in  China  it  seems  superfluous  to  repeat  argu- 
ments in  support  of  the  charge  made  against  the  Chinese  of 
bad  faith  as  regards  Treaty  obligations ;  but  so  little  seems  to 
be  known  at  home  as  to  the  actual  conditions  under  which 
foreign  trade  with  China  is  conducted,  that  a  short  statement 
regarding  them  may  be  permitted.     By  Treaty  China  bound 



herself  to  certain  regulations  for  the  conduct  of  her  trade, 
import  and  export,  with  foreign  countries.  A  Customs  tariff 
was  arranged  by  mutual  agreement,  the  duties  so  agreed  upon 
to  be  collected  at  the  ports  which,  by  Treaty,  were  opened  to 
foreign  trade.  The  collection  of  these  duties,  which  was  at 
first  in  native  hands,  came  subsequently  to  be  vested  in  the 
service  well  known  as  the  Chinese  Imperial  Maritime  Cus- 
toms, a  service  managed  by  Europeans,  but  with  its  sphere  of 
operations  confined  to  the  Treaty  ports.  So  far  as  the  collec- 
tion of  duties  through  this  source  is  concerned,  there  is  no 
complaint  whatever  to  be  made ;  the  service,  in  fact,  consti- 
tutes China's  only  honest  source  of  revenue,  and  forms  her 
main  available  asset.  But  beyond  this  provision  for  the  col- 
lection of  duties  at  the  ports,  the  Treaties  went  further,  and 
aimed  at  the  protection  of  merchandise,  being  the  subject  of 
foreign  trade,  in  its  movements  in  the  interior  of  the  country. 
It  may  be  at  once  admitted  that  the  framers  of  the  treaties 
were  very  insufficiently  acquainted  with  the  loose  fiscal  arrange- 
ments connecting  the  governments  of  China's  provinces  with 
the  Central  Government  in  Peking ;  and  it  is  this,  no  doubt, 
which  has  been,  and  is,  the  main  source  of  the  difficulties 
which  have  arisen.  At  the  same  time,  however,  the  condition 
of  the  relations  between  Peking  and  the  provinces  in  no  way 
lessened  the  responsibilities  of  the  Central  Government  as 
regards  the  Treaty  obligations  which  it  assumed.  The  ar- 
rangement arrived  at  in  connection  with  the  movement  of 
foreign  merchandise  in  the  interior  was  simply  that,  on  the 
payment  of  an  extra  half  duty,  transit  passes  could  be  claimed 
from  the  Chinese  Government,  under  which  imports  could 
be  moved  from  the  port  of  entry  to  anywhere  in  the  in- 
terior, and  exports  could  be  brought  from  anywhere  in  the 
interior  to  the  port  of  shipment,  exempting  them  (in  the  words 
of  the  Treaties)  *'from  all  further  inland  charges  whatsoever,^ 
The  wording  is  clear  enough,  and  the  intention  of  what  was 
meant  was  put  beyond  all  doubt  in  a  despatch  from  Lord 
Elgin  (the  framer  of  the  Treaty  of  Tientsin,  upon  which  the 
Treaties  with   other  countries  were   based)  to  the   Foreign 



Office  in  1855.  Lord  Elgin,  in  writing  of  the  newly  arranged 
transit  dues,  defines  them  as  '  a  sum  in  the  name  of  transit 
duty  which  will  free  goods,  whether  of  export  or  import,  to 
pass  between  port  of  shipment  or  entry  to  or  from  any 
part  of  China  without  further  charge  of  toll^  octroi^  or  tax 
of  any  description  whatsoever^  And  further,  in  the  same 
despatch  he  writes:  *I  have  always  thought  that  the  remedy 
(against  arbitrary  inland  taxation)  was  to  be  sought  in  the 
substitution  of  one  fixed  payment  for  the  present  irregular 
levies.'  Nothing  could  be  clearer,  yet  to  this  day — thirty 
years  since  the  Treaty  of  Tientsin  was  signed — the  transit- 
pass  system  is  an  utter  failure.  It  is  true  that  our  govern- 
ment has  insisted  (though  largely  ineffectually)  that  the  tran- 
sit pass  clears  goods  en  route  from  taxation,  but  this  limited 
interpretation  of  the  treaty  is  clearly  not  what  was  intended, 
the  wording  being  that  they  are  freed  from  ^all further  inland 
taxation  whatsoever,^  In  many  parts  of  China  transit  passes 
are  altogether  ignored,  and  in  others,  where  they  are  nominally 
recognized,  taxes  are  levied  on  transit-pass  goods  (at  desti- 
nation on  imports,  and  place  of  origin  on  exports)  destroying 
absolutely  the  immunity  from  arbitrary  inland  taxation  which 
the  Treaties  provided  for.  Ministers  and  Consuls  have  con- 
stantly endeavored  to  obtain  for  British  trade  in  China  the 
freedom  from  arbitrary  taxation  which  the  Chinese  Government 
agreed  to  give.  The  failure  of  their  attempts  can  only  be  attrib- 
uted to  want  of  support  at  home,  the  outcome  of  indifference 
and  want  of  appreciation  of  the  interests  involved.  The  result 
has  been  that  merchants,  tired  of  making  futile  representa- 
tions of  their  grievances,  have  simply  contented  themselves 
with  making  the  best  of  such  trading  opportunities  as  they 
found  open  to  them.  The  case  is  well  stated  in  Mr.  Consul 
Brenan's  report,  issued  last  year  (1897),  upon  the  '  State  of 
Trade  at  the  Treaty  ports  in  China.*  He  writes :  *  A  long 
and  painful  experience  of  thwarted  efforts  has  had  such  a  dis- 
couraging effect  upon  foreigners  in  China  that  a  condition 
of  stagnation  has  come  to  be  accepted  as  in  the  nature  of 

F  81 


*'  But  if  the  British  Government  has  allowed  the  provisions 
of  the  Treaties  to  become  a  dead  letter,  other  nations  have 
been  less  complacent  with  China  in  their  handling  of  the 
matter,  and  it  is  somewhat  humiliating  to  find  the  following 
passage  in  the  report  of  Mr.  Consul  Bourne,  who  accompanied 
the  recent  *  Blackburn  Mission  to  China.'  Writing  upon  the 
trade  of  Yunnan,  Mr.  Bourne  says :  *  Since  my  visit  to  this 
place  in  1885,  the  import  trade  in  foreign  goods  has  almost 
entirely  shifted  from  the  West  River  route  via  Pose-Ting  (i>., 
the  British  route)  to  the  Tongking  route  by  way  of  the  Red 
River  and  Mengtzu  (/>.,  the  French  route).  This  revolution, 
great  indeed  if  the  conservative  habits  of  the  Chinese  are 
remembered,  is  entirely  due  to  the  energy  of  the  French  in 
vigorously  enforcing  on  the  Chinese  Government  their  right 
to  transit  passes  to  cover  goods  from  Mengtzu  to  Yunnan-Fu.' 
Again,  on  the  same  subject,  Messrs.  Bell  and  Neville,  the 
members  of  the  Mission,  write :  '  There  is  little  chance  of  any 
increase  of  trade  (into  Yunnan)  by  the  overland  route  from 
Bhamo  (/>.,  the  Burmese  frontier  route),  for  goods  coming  this 
way  are  subjected  to  no  less  than  seven  different  duties,  where- 
as by  the  Mengtzu  route  transit  passes  are  recognized,  and 
the  *j\  per  cent,  paid  to  the  Imperial  Maritime  Customs  ex- 
empts the  goods  from  any  further  taxation.'  If  the  French 
have  been  able  to  enforce  upon  the  Chinese  Government  this 
respect  of  Treaty  rights,  how  is  it  that  we,  who  hold  some  64 
percent,  of  China's  total  foreign  trade,  have  so  entirely  failed  ? 
A  suggested  answer  is  that  our  failure  is  the  result  of  our  hav- 
ing treated  the  Central  Government  of  China  too  seriously ; 
that  our  Government  has  believed  that  the  effective  way  to 
obtain  redress  of  abuses  in  the  provinces  was  by  representations 
at  Peking :  China's  war  with  Japan  effectually  burst  this  bubble 
of  belief  in  the  supposed  strength  of  Peking,  and  has  shown, 
we  hope,  that  the  only  effective  policy  with  China  is  that  which 
we  employed  in  our  earlier  relations  with  the  country — namely, 
to  deal  with  abuses  where  they  occur,  and  to  face  Peking  with 
the  fact  of  grievances  already  redressed. 

"  Again,  it  may  not  be  generally  understood  at  home  that 



the  foreigner  in  China  has  no  liberty  of  residence  for  purposes 
of  trade  except  at  the  Treaty  ports;  he  may  ^travel  for  pur- 
poses of  trade/  but  may  not  establish  trading  stations  anywhere 
outside  the  limits  of  the  ports.  This  restriction  as  to  residence 
is  naturally  a  hindrance  to  the  development  of  foreign  trade 
and  enterprise  in  the  country,  and  the  point  has  special  interest 
at  the  present  time  in  view  of  the  concession  recently  obtained 
from  China  as  to  freedom  of  navigation  by  foreign  craft  over 
the  inland  waters  of  the  Empire.  The  concession  is  an  im- 
portant one,  but  it  is  practically  valueless  unless  it  is  accom- 
panied with  the  right  of  foreign  inland  residence;  it  is  an 
obvious  necessity  that,  for  the  protection  of  nu^rchandise  trans- 
ported by  foreign  craft  under  foreign  control,  there  must  be 
established  up-country  stations  and  depots,  where  foreigners, 
or  their  agents,  can  reside  for  the  management  of  the  traffic 
and  for  the  storage  and  delivery  of  goods. 

'*  It  is  the  want  of  security  which  is  the  main  reason  for  the 
stagnation  of  foreign  trade  with  China,  and  the  dangers  of  the 
present  situation  are  not  only  sufficient  to  hinder  further  trade 
development  and  extension  of  enterprise,  but  are  also  a  serious 
menace  to  the  trade  which  already  exists.  And  the  danger 
to-day  is  greater  than  it  ever  has  been ;  the  weakness  and  the 
corruption  of  the  Peking  Government  stands  confessed ;  its 
necessitous  financial  condition  requires  more  help  than  ever 
from  the  provinces  to  meet  the  foreign  obligations  to  which  it 
now  stands  committed,  and  at  the  same  time  its  power  over 
the  provincial  governments  is  becoming  less  and  less,  by  reason 
of  the  disaffection  which  is  making  itself  apparent  in  many 
parts  of  the  Empire.  What,  then,  is  likely  to  be  the  result 
upon  foreign  trade  in  the  interior  of  the  country  ?  The  revenue 
of  the  Imperial  Maritime  Customs,  of  which  the  provinces 
have  in  the  past  received  their  share,  is  now  practically  wholly 
hypothecated  for  the  service  of  the  foreign  loans ;  concurrently 
with  this  the  demands  from  Peking  for  more  money  from  the 
provinces  are  increased ;  what  can  be  the  result  other  than  an 
increase  of  inland  taxation  ?  As  one  means  of  supplying  the 
deficiency  in  her  revenue,  China  has  given  notice  of  revision 



of  the  existing  Foreign  Customs  Tariff,  but  she  offers  no 
security  for  the  remedying  of  the  abuses  of  which  we  have  for 
thirty  years  complained;  the  proposition  put  forward  by  Li 
Hung  Chang,  during  his  visit  to  London  in  1896,  was  merely 
that  the  existing  duties  be  doubled — an  ingenious  Oriental 
expedient  by  which  foreign  trade  should  be  made  to  bear  the 
expenses  of  China's  foreign  loans.  Foreign  traders  in  China 
are  generally  favorably  disposed  towards  a  revision  of  the 
existing  tariff  in  China's  favor,  but  they  at  the  same  time  most 
distinctly  demand  that  no  such  concession  shall  be  granted 
unless  full  security  be  given  for  the  protection  of  foreign  trade 
in  the  interior  against  the  abuses  experienced  in  the  past.  It 
seems  plain  that  such  security  can  only  be  found  in  the  entire 
reform  of  the  present  corrupt  system  of  Chinese  government ; 
the  undertaking  of  such  a  task,  no  doubt,  bristles  with 
difficulties,  and  entails  responsibilities  which  will  necessarily 
be  complicated  by  international  jealousies ;  it  is,  nevertheless, 
clear  that  unless  the  situation  be  boldly  faced,  still  greater 
difficulties  and  still  greater  international  troubles  will  have 
to  be  faced  in  the  near  future. 

"The  necessitous  financial  condition  of  China,  brought 
about  by  the  disaster  of  her  war  with  Japan,  and  her  obliga- 
tions thereby  incurred  with  European  countries,  makes  it  plain 
that  a  continuance  of  her  policy  of  exclusion,  and  contempt 
for  foreign  ways,  cannot  longer  be  maintained.  Pressure  from 
without,  powerfully  aided  by  an  empty  exchequer  within,  has 
already  persuaded  her  rulers  that  the  vast  natural  resources  of 
the  country  can  no  longer  be  permitted  to  remain  undeveloped, 
and  in  consequence  there  are  now  put  out  to  the  world  huge 
schemes  of  railway  and  mining  enterprise,  for  the  carrying  out 
of  which  foreign  capital  is  invited.  It  may,  however,  be  taken 
for  granted  that  before  responding  to  the  invitation  the  capi- 
talist will  pause  to  look  into  the  security  which  is  offered  ;  he 
may  reasonably  ask :  What  power  has  the  Central  Govern- 
ment at  Peking  to  protect  concessions  granted  in  the  Prov- 
inces ?  What  has  been  the  experience  in  the  past  as  to  China's 
good  faith  in  the  matter  of  treaty  engagements  and  contracts  ? 



What  amount  of  foreign  control  and  supervision  is  to  be  al- 
lowed in  the  expenditure  of  the  capital  asked  for  ?  Is  the  pres- 
ent prohibition  of  foreign  inland  residence  to  be  relaxed  in 
order  to  enable  foreign  supervision  of  foreign  inland  enter- 
prise ?  It  is  clear  that  in  the  answering  of  these  questions  is 
involved  the  further  one :  Is  this  much-talked-of  opening  of 
China  to  be  made  real,  or  is  it  a  sham  ?  If  it  is  to  be  made 
real  it  is  plainly  necessary  that  strong  foreign  influence  must 
be  used  to  prevent  repetition  of  the  chicanery  of  the  past. 
With  a  weak  Government  in  Peking,  open  to  be  played  upon 
by  the  jealousies  of  competing  Powers,  no  security  can  be 
looked  for,  except  such  as  may  be  found  in  force ;  the  es- 
tablishment of  a  Government  in  Peking,  which  is  not  only 
strong,  but  which  is  in  sympathy  with  the  wishes  and  feelings 
of  the  nation  at  large,  is,  we  believe,  a  first  necessity  if  China 
is  to  be  saved  from  partition.  We  believe  that  the  teachings 
of  progress  and  reform  have  been  widely  accepted  throughout 
the  Empire.  It  is  plain  that  wholesale  administrative  and  fiscal 
reform  is  imperative  both  for  the  salvation  of  China  herself,  as 
well  as  for  the  security  of  the  foreign  capital  which  she  is  in- 
viting for  the  development  of  her  resources.  Suggestions  as 
to  methods  of  reform  do  not  fall  within  the  scope  of  this 
memorandum ;  sufBce  it  to  say  that  the  practical  side  of  the 
question  has  not  been  neglected  by  this  Association,  and  it 
may  be  fairly  claimed  that  the  British  Government  has  re- 
ceived— from  its  Ministers,  Consuls,  and  Merchants — a  suffi- 
ciency of  facts,  opinions,  and  suggestions  from  which  a  definite 
and  resolute  policy  might  long  ago  have  been  deduced. 

"  For  the  carrying  out  of  schemes  of  reform  it  is  clearly 
necessary  that  there  must  be  some  foundation  of  strength  upon 
which  to  base  action  ;  naturally  this  ought  to  be  supplied  by 
Peking,  the  Central  Government  being  made  an  effective 
power  for  the  execution  of  its  commands  throughout  the  Em- 
pire. For  it  is  plain  that,  in  the  absence  of  a  dominating  cen- 
tra] power — a  power  strong  enough  to  maintain  the  Empire^s 
integrity,  there  need  be  no  further  talk  about  the  maintenance 
of  the  •  Open  Door '  and  equality  of  trading  opportunity,  con- 



ceming  which  our  statesmen  have  said  so  much.  Weakness 
in  Peking  must  inevitably  mean  disruption  and  partition  of  the 
Empire,  and  it  may  be  reasonably  suggested  that  it  was 
through  some  shadowy  conception  of  this  fact,  and  through 
an  unwillingness  to  accept  the  responsibilities  of  maintaining 
Peking  authority,  which  brought  into  being  the  alternative 
policy  to  that  of  the  *Open  Door' — namely,  that  of  the 
'  Sphere  of  Influence' ;  needless  to  say  that  the  two  policies 
are  directly  opposed  to  each  other.  But  whether  China  be 
maintained  intact,  or  whether  China  be  partitioned,  the  neces- 
sity for  reform  remains  the  same,  the  only  difference  being 
that  whereas  in  the  former  case  the  reform  measures  would 
emanate  from  one  strong  centre,  and  be  applied  to  the  Empire 
at  large,  in  the  latter  case  they  would  be  applied  over  restricted 
areas  by  the  occupants  of  the  '  spheres.'  We  submit  that  the 
jealousies  and  complications  in  jurisdictional  matters,  which 
must  inevitably  arise  between  the  different  occupants,  form  a 
far  more  serious  danger  to  the  general  peace  than  any  which 
is  entailed  in  a  bold  policy  for  the  maintenance  of  China's  in- 
tegrity with  a  central  point  of  strength.  Great  things  may  be 
judged  by  small,  and  the  dangers  of  the  '  Sphere  of  Influence ' 
policy  are  to-day  being  illustrated  in  Shanghai,  through  the 
claims  of  one  nation  to  exclusive  jurisdiction  over  parts  of 
these  Settlements,  in  which  we  maintain  the  door  is  open 
to  all. 

"  We  say,  then,  that  the  one  thing  wanted  for  the  develop- 
ment of  trade,  for  the  protection  of  capital,  and  for  the  exten- 
sion of  enterprise  in  China  is  security,  and  we  say  that  such 
security  can  only  be  found  in  the  reform  of  the  country,  which 
can  only  be  effected  through  pressure  from  without ;  and  we 
further  say  that  the  vast  preponderance  of  British  interests  in 
China  clearly  demands  that  Great  Britain  shall  lead  and  guide 
the  movement  We  attribute  the  hitherto  neglect  of  the  China 
question  by  our  Government,  and  the  policy  of  drift  into 
which  we  have  fallen,  to  a  mistaken  estimate  of  the  strength 
of  British  prestige  in  the  Far  East,  coupled  with  a  fallacious 
belief  in  the  power  of  China  herself ;  other  nations,  newer  in 



the  field,  and  comparatively  unhampered  by  traditions  of  the 
past,  have  seemingly  been  better  able  to  interpret  events  in 
the  light  of  common  experience,  and  have  found  opportunity 
in  our  complaisance  and  inactivity  to  exploit  the  situation 
to  our  disadvantage.  We  do  not  wish  to  concern  ourselves 
with  any  imperfectly  understood  catch  phrases  such  as  'Open 
Door  *  or  *  Sphere  of  Influence,'  further  than  to  say  that  Great 
Britain's  sphere  of  influence  should  be  wherever  British  trade 
preponderates,  with  the  door  open  for  equal  opportunity 
to  all ;  this  is  an  ideal  which  can  never  be  reached  without 
resolute  determination  on  the  part  of  the  British  Cabinet  to 
lead  and  not  to  follow  in  Peking.  We  do  not  hide  from  our- 
selves the  difliculties  which  must  be  faced  in  order  to  bring 
about  China's  reform,  and  we  therefore  urge  that  Great  Britain, 
in  leading  the  movement,  should  endeavor  to  obtain  the  co- 
operation of  other  great  nations  who  have  like  aims  and  in- 
terests with  ourselves — that  is  to  say,  whose  interests  lie  in 
commercial  development,  and  who  are  not  aiming  at  terri- 
torial aggrandizement. 

"  C.  J.  Dudgeon,  Chairman^ 

Looking  carefully  into  the  cases  enumerated  in 
the  memorandum,  I  am  of  opinion  that  in  one  or 
two  particulars  the  statements  are  misleading.  It 
is  not  correct  to  say  that  the  transit  passes  are  "  an 
utter  failure."  They  were  so  until  the  present 
British  Minister,  Sir  Claude  MacDonald,  went  to 
China;  but  that  cannot  be  said  now,  and  it  is  un- 
fair not  to  recognize  his  Excellency's  e£forts  and 
measure  of  success.  The  real  fault  is  in  adhering 
to  the  Board  of  Trade  decision  of  thirty  years  ago, 
recognizing  terminal  taxation. 

On  the  following  day,  October  7th,  a  deputation 
of  the  Shanghai  Chamber  of  Commerce  (a  cosmo- 



politan  body  representing  all  nationalities)  pre- 
sented me  with  an  address  {see  Appendix).  A 
German  member  declared  that  the  Commercial 
Mission  of  Inquiry  to  China  would  be  for  the  bene- 
fit of  the  whole  community,  whether  British  or 
foreign.  An  American  member  affirmed  that  the 
trading  interests  of  England  and  the  United  States 
were  identical,  and  that  the  American  community 
were  very  grateful  to  the  Associated  Chambers 
for  sending  out  a  mission  to  inquire  into  those 
questions  vitally  affecting  trade  and  commerce. 
Points  particularly  alluded  to  in  this  address : 

(i.)  Non-observance  of  treaties  on  the 
part  of  China,  whereby  foreign  trade  and  com- 
merce have  suffered. 

(2.)  Question  of  tariff  reform. 

(3.)  Question  of  necessity  for  getting  Con- 
servancy Board  for  Shanghai,  in  order  to  pro- 
vide proper  harbor  accommodation  and  do 
away  with  Woosung  bar. 

(4.)  Necessity  for  increasing  foreign 
settlements  in  Shanghai  by  means  of  exten- 

These  points  are  of  importance  to  the  trade 
of  all  nations,  but  are  of  especial  and  particular  in- 
terest to  that  of  Great  Britain,  whose  trade  is  in 

A  very  important  question  affecting  commercial 
interests  in  the  future  was  brought  to  my  notice  by 
the  Chamber  of  Commerce  and  the  China  Associa- 



tion.  It  is  the  question  of  validity  of  contracts 
made  between  Chinese  and  foreigners. 

The  question  is  illustrated  by  the  foUowingfacts : 
The  Bank  of  China  and  Japan  was  incorporated  in 
December,  1889,  with  the  nominal  capital  of  one 
million,  which  was  afterwards  increased  to  two 
millions  in  February,  1891. 

When  the  Company  was  found  to  be  doing  a 

profitable  business  a  large  number  of  Chinese 
bought  shares,  but  before  they  were  allowed  to 
become  shareholders  they  had  to  sign  the  follow- 
ing agreement; 

"I  hereby  request  you  to  register  me  as  the  holder  of 

ordinary  shares  of  the  Bank  of  China,  Japan,  and  the  Straits, 
Limited,  transferred  to  me,  and,  in  consideration  of  your  doing 
so,  I  agree  to  pay  the  calls  in  respect  of  all  moneys  unpaid  on 
the  said  shares  at  the  time  and  place  arranged  by  the  directors 
pursuant  to  the  Articles  of  Association. 

"  And  I  further  agree  that  all  questions  between  me  and 
the  Bank  shall  be  decided  in  accordance  with  the  Law  of 

The  bank  got  into  difficulties  in  1893,  at  which 

time  the  shares  had  a  liability  of  about  j^y  los. 

unpaid  calls,  and  it  was  resolved  to  call  up  £  i  per 

share.     The  Chinese  shareholders  refused  to  pay, 

notwithstanding  the  agreement  they  had  signed, 

which  was  written  in  Chinese  as  well  as  English. 

This  action,  and  the  magnitude  of  the  total  sum 

involved  (upwards  of  ;^4CX),ooo)  forced  the  bank 

into   liquidation   and   reconstruction.      The   case 

was  tried  before  his  Honor  Tsai  Chiin,  Shanghai 



Taotai,  and  Mr.  Byron  Brenan,  C.M.G.,  H.B.M. 
Consul,  at  a  special  sitting.  Notwithstanding  the 
protest  of  Mr.  Brenan,  the  Taotai  delivered  judg- 
ment in  favor  of  the  Chinese.  The  question 
whether  a  Chinese,  having  made  such  an  agree- 
ment, not  in  conflict  with  any  treaty,  may  be  al- 
lowed to  break  it  when  it  suits  him,  is  one  of  grave 
importance  to  the  whole  mercantile  community  in 
China,  The  British  Minister,  Sir  Claude  Mac- 
Donald,  has  warmly  taken  up  the  case,  but  the 
merchants  feel  that  it  is  the  duty  of  the  Home 
Government  to  deal  effectively  and  promptly  with 
such  a  serious  matter. 

I  was  informed  that  the  Chinese  merchants  who 
had  taken  shares  in  this  Corporation  were  anxious 
to  pay  the  call  demanded,  but  that  the  Chinese 
shareholders  included  several  Mandarins  and  of- 
ficials, and  it  was  these  latter  who  objected  to  pay 
the  call.  The  merchants  are  afraid  to  run  counter 
to  those  in  authority. 


I  was  informed  that  there  were  twelve  cotton- 
mills,  built,  building,  or  projected,  at  the  time  of 
my  visit  to  Shanghai.  The  industry  for  the  mo- 
ment was  dull,  owing  to  over-production  and  the 
large  import  of  Indian  yarn.  From  personal  ob- 
servation, I  do  not  think  that  the  Chinese  will  be 
formidable  competitors  in  the  manufacture  of  cot- 
ton, unless  they  employ  foreign  management  and 



foremen.     They  allow  nothing  for  depreciation 
and  maintenance,  but  take  all  available  assets  to 
,  pay  interest  and  to  secure  high  dividends. 

In  the  Yangtse  Valley  generally  the  Chinese 
are  learning  to  make  a  cheap  yarn,  which  they 
have  been  in  the  habit  of  importing  from  Japan 
and  India. 

The  Japanese  and  Chinese  cotton  is  too  short 
and  fragile  in  the  staple.  American  and  Indian 
cotton  has  to  be  imported  to  employ  the  mills,  as 
the  Chinese  prefer  to  buy  the  yarn  and  make  the 
piece-goods  themselves.  There  is  only  one  mill 
(Ewo)  in  Shanghai  that  makes  piece-goods ;  all  the 
others  are  devoted  to  making  yarn. 

I  visited  the  Cotton  Mills  in  October,  1898. 
They  were  only  working  half-time,  and  some  of 
the  Chinese  mills  had  closed  altogether.  The 
piece-goods  industry  is  particularized  in  this  Re- 
port owing  to  the  fact  that  although  it  appears  as 
English  trade  in  the  Imperial  Customs  Returns, 
and  although  it  is  owned  by  the  British,  and  has 
been  brought  from  America  in  British  bottoms,  still 
it  is  American  manufactured,  and  the  producer  and 
original  owner  were  American.  The  British  mer- 
chants, however,  derive  a  most  important  and 
lucrative  trade  by  transporting  this  cotton  in 
British  ships,  and  disposing  of  it  to  the  Chinese. 
It  may  be  remarked,  also,  that  the  Chinese  want 
the  American  cotton,  particularly  in  the  North,  be- 
cause it  is  made  in  the  width  they  require,  and  of 
the  thicker  texture  required  in  the  cold  climate. 



I  asked  to  be  supplied  with  some  details  for  the 
Associated  Chambers  relative  to  cotton  imports. 
I  append  the  interesting  Table  of  Comparisons 
that  I  obtained.     {See  Table  opposite) 

From  this  Table,  which  analyzes  China's  import 
trade  in  cotton  goods  and  yarns  (a  trade  which 
forms  some  40^  of  the  whole),  it  will  be  seen  that 
during  the  last  ten  years  America  has  increased 
her  interest  in  the  importation  of  plain  goods  by 
121^  in  quantity  and  69i^  in  value;  on  the  other 
hand,  the  interest  of  Great  Britain  and  of  India  in 
similar  goods  has  decreased  131^  in  quantity  and 
8^  in  value. 

There  can  be  no  question  that  this  competi- 
tion of  America  with  Lancashire  and  India  (more 
particularly  with  the  former)  will  become  keener 
as  time  goes  on.  Ten  years  ago  America's  inter- 
est in  the  piece-goods  trade  with  China  was  con- 
fined to  her  exports  of  surplus  domestic  goods — 
that  is,  of  goods  manufactured  for  home  consump- 
tion, and  which  were,  for  the  most  part,  of  too 
high  a  standard  of  quality  for  general  Chinese  use. 
The  circumstances  are  now,  however,  altogether 
changed,  in  that  America  is  rapidly  becoming  an 
exporting  country,  and  her  manufacturers,  seeing 
the  advantages  which  their  nearness  to  the  China 
market  gives  them,  are  directly  competing  with 
Lancashire  for  the  trade  by  erecting  mills  for  the 
special  manufacture  of  goods  suitable  for  the  Chi- 
nese market.     The  great  difiference  between  the 

two  percentages  of  increase  in  quantity  and  in- 




•  • 


crease  in  value  shows  that  a  considerably  lower 
standard  of  goods  is  being  made,  which  is,  of  course, 
to  meet  the  Chinese  requirement  of  cheapness. 

A  somewhat  interesting  question  is:  What  part 
are  British  merchants  playing  in  this  development 
of  the  American  piece-goods  trade  with  China? 
The  point  may,  perhaps,  be  conveniently  divided 
into  two  heads,  say: 

( I .)  Origin  of  Goods. 
(2.)  Ownership  of  Goods. 

As  regards  "  Origin,"  it  is,  of  course,  clear  that  any 
increase  in  America  s  share  in  the  China  trade  is 
so  much  to  the  detriment  of  the  British  manu- 
facturer. But  a  wider  question  is :  How  does  such 
increase  affect  British  trade?  This  point,  I  think, 
must  be  decided  on  the  ground  of  "  Ownership"; 
it  is  clear  that  if  an  Englishman  buys  (say)  cowrie- 
shells  in  Africa,  these  cowrie-shells  become  a  sub- 
ject of  British  trade  as  soon  as  they  have  passed 
into  his  hands;  similarly  if  he  buys  American 
piece-goods  in  New  York,  these  goods  in  the 
same  way  become  a  subject  of  British  trade  as 
soon  as  he  is  possessed  of  them — the  question  of 
origin  is  an  entirely  separate  one. 

The  point  is,  how  much  of  this  trade  in  Amer- 
ican goods  is  American  -  owned,  and  how  much 
^x\\x^-owned?  The  question  is  not  an  easy  one 
to  answer,  but  an  approximate  conclusion  can  be 
arrived  at.  There  are  in  Shanghai  only  two  pure- 
ly American  firms  of  standing — ue.,  firms  engaged 



in  the  piece-goods  trade;*  there  are  also  two 
firms  of  mixed  American  and  English  partnership. 
These  four  firms  do  a  large  business  in  American 
goods,  and  we  will  allow  that  all  such  business  is 
American-owned ;  but  on  the  other  hand  there  are 
numbers  of  purely  British  firms  engaged  in  the 
American  trade.  I  was  told  that  fully  60  per  cent 
of  American  Piece-Goods  are  British-owned,  while 
nearly  the  whole  trade  is  carried  under  the  British 
flag  and  financed  through  British  banks.  If,  then, 
the  table  was  arranged  from  the  point  of  view  of 
ownership,  it  would  stand  approximately  as  follows: 


English  and  Indian 

605^  of  American, 
English-owned  . 

40^  of   American, 

Quantity.        Value. 

Quantity.  Value. 

*(  Quantity. 

Jl  Value. 









1. 14  dec. 




1,048, 800  J 





115.35  inc. 





11.80  inc. 

2.12  inc. 

37.30  inc. 
7.29  inc. 

1887.  British  interest  in  ownership,     91^.     American,     g% 
1897.  "  "  "        86.6ijr.  "      13.39^ 

*  The  following  are  the  American  firms  in  Shanghai :  The 
American  Trading  Company  (large  importers  of  goods) ;  the 
China  and  Japan  Trading  Company  (large  importers  of  goods); 
Messrs.  Macey  &  Co.  (tea  only) ;  Messrs.  Frazar  &  Co.  (prob- 
ably do  a  small  business  in  goods);  Messrs.  Fearon,  Daniel 
&  Co.  (large  importers;  firm  half  English);  Messrs.  Wisner 
&  Co.  (moderate  importers ;  firm  half  English);  The  Stand- 
ard Oil  Company  (kerosene-oil  only). 



In  other  trades  than  piece-goods  America  has 
large  interests  which  are  practically  all  her  own, 

Kerosene-oil.  Value,  1887,^^330,000;  value,  i897,;;^i,oi9,4oo 
Flour.  "         "         145,000;     "        "  180,600 

She  has  also  a  large  interest  in  Lumber  (total 
value,  1887,  ;^68,50o;  1897,  ;^55»20o),  and  an 
increasing  interest  in  Machinery  {\%%t,  £^(},2fiO\ 
1897,  ;^402,ooo),  though  the  carrying  is  largely 
under  the  British  flag. 

Before  I  left  Shanghai  on  the  loth  of  October, 
I  had  three  interviews  with  the  Marquis  Ito,  the 
late  Japanese  Prime-Minister.  He  expressed  the 
greatest  friendliness  towards  Great  Britain,  and 
the  gravest  anxiety  with  regard  to  the  future  of 
China,  as  he  declared  that  unless  China  supplied 
herself  with  an  efficient  military  and  police,  dis- 
turbances were  certain  to  occur  which  would 
endanger  the  life  and  property  of  the  foreigners. 
Foreigners  might  be  called  upon  to  interfere  in 
defence  of  their  interests,  which  would  eventu- 
ally lead  to  the  dismemberment  of  China.  The 
Marquis  seemed  interested  in  the  suggestion  that 
a  commercial  understanding  should  be  consider- 
ed between  Japan,  America,  Germany,  and  Great 
Britain,  based  on  the  integrity  of  China  and  equal 
trade  opportunities  for  all  nations.  The  Marquis 
declared  that  the  trading  interests  of  Japan  and 
Great  Britain  were  identical  in  the  East,  and  said 
that  each  country  could  materially  help  the  other 



He  also  declared  that  a  policy  such  as  was  sug- 
gested with  regard  to  keeping  the  door  open 
would  not  be  a  selfish  policy,  but  would  benefit 
the  trade  of  all  nations. 

He  declared  that  the  Chinese  Government  was 
so  weak  as  to  have  lost  all  control,  and  must 
shortly  fall.  He  agreed  that  the  four  trading  Pow- 
ers—Great Britain,  America,  Japan,  and  Germany 
— might,  for  the  protection  of  trade  and  commerce 
of  all  nations,  assist  China  in  the  reorganization 
of  her  forces  with  the  help  of  foreign  officers  and 
non-commissioned  officers.  Marquis  Ito  said  he 
was  sure  there  would  be  no  objection  on  the  part 
of  Japan  to  a  British  subject  undertaking  this  re- 
organization with  the  combined  help  of  the  other 
Powers,  that  Great  Britain  had  a  good  right  to 
do  this,  owing  to  the  preponderance  of  her  vested 
interest,  and  that  the  British  had  proved  them- 
selves excellent  at  leading  and  organizing  Eastern 
peoples.  He  thought  Corea  should  be  included 
with  China  as  regards  the  question  of  the  Open 
Door.  He  also  declared  that  the  whole  commer- 
cial future  of  Japan  and  England  depended  upon 
the  policy  now  pursued. 

It  must  be  remembered  that  the  Marquis  Ito 
has  been  all  over  China,  and  knows  the  Chinese 
better  perhaps  than  any  other  foreigner.  His 
opinions  are,  therefore,  most  valuable  to  the  Asso- 
ciated Chambers  of  Commerce.  He  heartily  up- 
held the  opinion  that  an  effective  reorganization 
of  the  military  and  police  forces  of  the  Empire 



would  be  a  sufficient  guarantee  for  the  security  of 
trade  and  commerce. 

The  Marquis  Ito  was  out  of  office,  and,  like  my- 
self, was  paying  an  entirely  unofficial  visit  to 

Hearing  that  his  Excellency  Kwei  Chun,  the 
newly  appointed  Viceroy  of  Szechuan,  was  at 
Shanghai  on  his  way  to  take  up  his  appointment, 
I  called  and  had  two  interviews  with  him.  I  in- 
formed his  Excellency  that  the  Associated  Cham- 
bers would  take  great  interest  in  any  suggestion 
he  might  make  for  the  improvement  and  develop- 
ment of  trade  and  commerce  in  the  provinces  un- 
der his  control.  His  Excellency  expressed  him- 
self in  terms  most  friendly  to  England,  and  said 
he  would  do  what  he  could  to  further  the  develop- 
ment of  foreign  trade,  and  to  open  the  country  to 
merchants,  manufacturers,  and  miners.  He  also 
informed  me  that  the  provinces  he  was  about  to 
administer  were  extremely  rich  in  coal,  iron,  and 
many  other  minerals,  none  of  which  had  as  yet 
been  opened  up.  I  took  the  opportunity  of  point- 
ing out  to  his  Excellency  that,  unless  China  very 
shortly  took  steps  to  provide  that  security,  by 
means  of  military  and  police,  which  it  was  the 
right  of  foreign  countries  to  demand  for  the  pro- 
tection of  their  trade  and  commerce,  she  was  cer- 
tain to  fall  to  pieces,  and  in  such  an  event  was 
equally  certain  to  be  split  up  into  European  prov- 
inces. On  pointing  out  to  his  Excellency  that 
China  might  save  her  integrity  by  asking  Great 
G  97 


Britain  and  the  trading  nations  to  organize  her 
forces  as  a  whole,  his  Excellency  heartily  agreed 
with  the  proposal,  saying  he  wished  it  could  be 
done,  but  that  such  matters  rested  with  the  Impe- 
rial Government. 

I  was  informed  that  one  of  the  most  prominent 
Reformers,  Huang  Chin,  had  been  arrested,  and 
was  to  be  sent  to  Nanking  for  execution.  Six  of 
his  associates  had  just  been  executed  at  Peking. 
I  told  the  Viceroy  that,  in  my  humble  opinion,  if 
these  political  murders  continued  there  were  cer- 
tain to  be  disturbances  in  China,  and  as  such  dis- 
turbances were  prejudicial  to  trade  and  commerce, 
it  might  cause  the  British  to  interfere ;  but  that, 
anyhow,  the  British  public  mind  would  be  con- 
siderably exercised  if  these  political  murders  con- 
tinued. I  therefore  urged  the  Viceroy  to  use  his 
influence  to  save  Huang's  life.  Huang,  I  am  glad 
to  say,  was  not  executed,  but  suffered  banishment 

The  question  of  the  extension  of  the  foreign  set- 
tlement is  one  that  is  intimately  connected  with 
the  protection  and  security  of  foreign  life  and 
property  in  Shanghai.  The  so-called  British  set- 
tlement is  really  cosmopolitan,  and  includes  land- 
owning residents  of  many  nationalities.  For  a 
long  time  it  has  outgrown  its  limits,  and  many 
requests  have  been  sent  to  the  Chinese  Govern- 
ment through  the  British  Minister  for  its  expan- 
sion. No  territorial  rights  have  been  asked  for, 
but  merely  an  extension  of  the  municipal  control 

as  it  exists  in  the  present  settlement.     The  French 



alone  hold  aloof  from  the  request  for  a  cosmopoli- 
tan extension  by  demanding  an  extension  of  their 
own  settlement.  It  is  worthy  of  remark  that  a 
short  time  ago  the  French  Consul  -  General,  as 
Z?^^«,  claimed  the  right  to  preside  over  the  de- 
liberations regarding  matters  connected  with  the 
cosmopolitan  settlement,  while  the  French  will  not 
allow  any  interference  whatever  in  matters  con- 
nected with  their  own  settlement,  over  which  they 
claim  supreme  control.  Practically  they  claim  sov- 
ereign rights  over  their  own  settlement ;  indeed, 
they  claim  that  it  is  the  "  soil  of  France."  As  a 
matter  of  fact,  the  French  Treaties  with  regard  to 
their  settlement  are  word  for  word  identical  with 
the  Treaties  agreed  to  by  the  Chinese  Government 
with  other  nations.  The  French  have,  therefore, 
no  exclusive  rights. 

The  last  claim  that  was  made  by  the  French  for 
an  increase  of  settlement  in  December  was  for  a 
concession  of  land  in  Shanghai,  including  the  old 
river  frontage  of  the  Chinese  city,  with  its  newly 
built  stores,  warehouses,  and  wharfage,  all  lit  by 
electric  light,  in  excellent  order,  and  actively  em- 
ployed, plus  another  block  on  the  other  side  of  the 
Chinese  city.  These  two  claims,  if  granted,  to- 
gether with  the  present  situation  of  the  French 
settlement,  would  enclose  the  Chinese  city  on  three 
sides.  The  Bund  claimed  is  one  of  the  only  Chi- 
nese works  of  this  kind  in  the  Empire,  carried  out 
on  their  own  initiative.     It  cost  40,cxx)  taels  (over 



The  origin  of  these  claims  was  a  demand  for 
compensation  by  the  French  Consul-General  for 
a  riot  and  disturbance  at  the  Ningpo  Joss-house 
burial-ground  on  the  i6th  of  July,  1898.  The 
cause  of  the  riot  was  a  demand  by  the  French  for 
the  Ningpo  Joss-house  burial-ground  to  be  included 
in  a  French  settlement  under  French  regulations 
in  order  to  erect  a  public  abattoir.  This  burial- 
ground  contains  thousands  of  graves  of  all  ages. 
The  French  Consul  further  demanded  that  all  the 
old  coffins  in  the  public  cemetery  in  the  Ningpo 
Guild  should  be  removed  by  the  surviving  relatives 
of  the  dead,  and  in  future  not  a  single  coffin  was 
to  be  placed  in  the  Joss-house  or  buried  in  the 
grounds.  The  French  Consul-General  further 
stated  that  it  must  be  clearly  understood  that  when 
an  extension  of  the  Anglo-American  (or  cosmopol- 
itan) settlement  is  made,  an  equivalent  extension 
should  be  made  to  the  French  settlement.  With  ref- 
erence to  the  question  of  the  Ningpo  Guild  Joss- 
house,  it  must  be  borne  in  mmd  that  the  Chinese 
pay  the  utmost  reverence  to  their  dead.  In  fact, 
it  may  be  said  the  only  religion  the  Chinese  really 
possess  is  a  devout  worship  for  their  ancestors. 
Besides  which  Chinese  law  forbids  th.e  removal 
of  graves  except  with  the  consent. of  the  relatives. 

The  riot  of  i6th  of  July,  1898,  was  caused  by 
the  French  landing  armed  seamen  and  trying  to 
take  possession  of  the  Ningpo  Guild  Joss-house 
ground  by  knocking  down  the  walls.  A  mob  col- 
lected and  commenced  throwing  stones  at  every 



foreigner  who  presented  himself.  The  mob  was 
charged  by  the  French  blue-jackets  and  several  vol- 
leys were  fired,  the  result  being  thirteen  Chinamen 
were  killed  outright  and  thirty  wounded,  of  whom 
four  died  later.  It  happened  that  on  my  arrival 
at  Nanking  a  French  cruiser  was  lying  at  anchor 
opposite  the  town  with  the  French  Consul-General, 
M.  Bezaure,  on  board.  In  the  course  of  one  of  my 
interviews  with  the  Viceroy,  Liu  Kwen  Yi,  his 
Excellency,  after  stating  he  knew  the  British  were 
friendly  to  the  Chinese,  asked  me  my  opinion  of 
the  case.  I  explained  to  his  Excellency,  as  repre- 
senting British  trade  and  commerce,  that  if  he  ac- 
ceded to  the  demands  of  M.  Bezaure,  it  was  only 
natural  a  disturbance  would  be  created  by  the  Chi- 
nese; that  no  one  knew  to  what  extent  a  riot  in 
the  East,  and  particularly  in  China  (owing  to  the 
intense  dislike  of  the  Chinese  for  a  foreigner) 
would  grow.  That  if  a  riot  commenced,  British, 
American,  German,  and  other  cosmopolitan  com- 
munities would  arm  their  volunteers,  and  might 
have  to  fire  on  a  Chinese  mob  in  defence  of  their 
life  and  property,  although  they  had  nothing  what- 
ever to  do  with  the  origin  of  the  disturbance.  The 
result  would  be  that  it  would  bring  the  whole  of 
the  foreigners  on  the  one  side,  and  the  Chinese 
people  on  the  other;  although  I  was  aware  the 
cosmopolitan  community  referred  to  was  totally 
opposed  to  the  demands  made  by  the  French 
Consul-General.  I  also  told  his  Excellency  that 
if  he  refused  the  demands,  nothing  whatever  could 



happen  I  pointed  out  that  these  disturbances 
were  fatal  to  the  interests  of  trade  and  commerce, 
and  that  I  thought  it  unlikely  that  the  French 
Government  would  be  so  unchivalrous  as  to  make 
such  exorbitant  demands;  but  that  what  had  pos- 
sibly occurred  was  that  the  French  Consul-General 
had  exceeded  his  instructions,  an  episode  common 
to  the  agents  of  all  nations  in  matters  of  a  like 

On  arrival  at  Shanghai,  after  my  visit  to  Nan- 
king, I  was  asked  to  attend  a  meeting  composed  of 
representatives  of  the  trading  communities  of  Ger- 
many, America,  Japan,  and  Great  Britain.  Having 
been  informed  by  members  of  the  Shanghai 
Chamber  of  Commerce  that  these  French  claims 
were  seriously  interfering  with  trade  owing  to  the 
disquietude  in  the  minds  of  the  Chinese,  and  also 
on  being  asked  to  give  an  opinion,  I  repeated 
what  I  had  said  to  the  Viceroy,  holding  that  no 
one  section  of  a  cosmopolitan  community  had  any 
right  to  take  action  certain  to  bring  about  dis- 
turbances which  would  jeopardize  the  lives  and 
property  of  the  remainder  of  such  community. 
As  it  was  known  that  I  was  the  representative  of 
the  British  Associated  Chambers  of  Commerce,  I 
think  it  right  to  report  this  circumstance. 

The    French   further   demanded    an   exclusive 

claim  to  a  large  area  known  as  Paotung,  on  the 

opposite  side  of  the  river  from  Shanghai  city,  a 

locality  in  which  they  have  no  interest  whatever. 

There   are  warehouses,  factories,  wharves,  docks, 

1 02 


and  extensive  business  properties  at  Paotung,  but 
all  owned  by  British  and  American  subjects.  If 
the  French  extension  took  place  as  the  French 
Consul -General  demanded,  it  would  include  a 
quantity  of  English  land  registered  in  the  British 

On  the  night  before  the  final  departure  of  the 
Mission  from  China  I  was  entertained  at  a  farewell 
dinner.  This  fact  is  notable  on  account  of  the 
strongly  representative  and  cosmopolitan  character 
of  the  hosts,  who  consisted  of  the  following  four 
corporations:  The  Shanghai  Chamber  of  Com- 
merce (a  body  representing  all  nations),  the  Munic- 
ipal Council  (ditto),  the  Shanghai  Branch  of  the 
China  Association  (British),  and  the  American- 
Asiatic  Association.  This  event  will,  I  feel  sure, 
be  gratifying  to  the  Associated  Chambers.  The 
resolution  passed  at  this  dinner  was  to  the  follow- 
ing eflFect: 

''That  our  cordial  thanks  be  tendered  to  Lord  Charles 
Beresford  for  the  service  he  has  rendered  to  the  foreign 
communities  in  China,  by  personal  investigation  into  the 
conditions  of  the  various  interests  we  represent." 

The  speakers  to  this  resolution,  representing 
various  countries,  all  dwelt  with  complete  approval 
upon  the  policy  of  the  Open  Door. 

I  had  several  interviews  with  the  Taotai  of 
Shanghai,  who  appeared  deeply  interested  in  any- 
thing that  concerns  the  welfare  of   British  trade 

and  commerce.     He  was  once  thought  to  be  very 



friendly  to  foreigners,  but  has  lately  received 
evident  marks  of  displeasure  from  Peking,  which 
apparently  have  modified  his  views.  He  had  re- 
ceived an  intimation  that  he  would  be  relieved  of 
his  lucrative  office  before  the  customary  time. 
On  my  pointing  out  to  him  that  China  must  in- 
evitably be  broken  up  into  European  provinces 
unless  she  provided  an  army  adequate  for  the  pro- 
tection of  foreign  trade  and  capital,  his  Ex- 
cellency cordially  agreed,  and  said  that  years  ago 
he  had  written  memoranda  advocating  an  alliance 
with  Great  Britain  in  support  of  it;  but  he  added 
that  late  events  had  proved  that  Great  Britain  was 
afraid  of  Russia,  and  that  in  the  event  of  China 
requesting  Great  Britain  to  undertake  such  re- 
organization, he  believed  she  would  decline  if 
Russia  peremptorily  forbade  such  a  proposal.  He 
also  said  that  he  believed  most  of  the  Viceroys 
were  strongly  of  the  opinion  that  if  England  would 
consent  to  reorganize  the  Chinese  Army  the  Em- 
pire might  yet  be  saved. 

While  at  Shanghai,  I  had  several  interviews 
with  Christian  missionaries  of  all  denominations 
and  nationalities.  They  were  unanimously  of 
opinion  that  the  "Open  Door"  policy  would  be  the 
only  policy  to  secure  the  further  development  of 
trade  in  China;  and,  further,  that  pursuance  of 
this  policy  was  the  only  one  which  promised 
success  for  the  future  of  their  missionary  work  in 

I  visited  a  French  Jesuit  Mission  at  Shanghai, 



a  most  powerful  organization  that  has  done  grand 
work  in  China,  particularly  in  connection  with 
science.  There  is  no  community  that  knows  China 
and  the  Chinese  more  thoroughly.  I  was  glad  to 
find  that  these  fathers  were  enthusiastically  in 
favor  of  the  policy  of  equal  opportunity  in  China, 
and  the  reorganization  of  her  army,  to  give  security 
to  commerce  and  missionary  work.  The  fathers 
saw  no  difficulty  whatever  in  carrying  out  this 
policy,  as  they  declared  the  Chinese  were  easily 
governed  and  led.  All  the  enlightened  people 
were  hoping  for  reform,  and  the  fathers  declared 
it  was  only  the  eflFete  system  of  government  that 
was  barring  the  way. 



The  estimated  population  is  150,000 

I  ARRIVED  at  Nanking,  which  place  it  must  be 
remembered  is  not  an  open  port,  December  9, 
1898,  on  board  H.I.M.S.  Nansktn,  zndi  received  a 
salute  of  fifteen  guns. 

The  Viceroy,  Liu  Kwen  Yi,  sent  the  Admiral 
commanding  the  Nanyang  fleet,  Chen  Yi,  to  call 
on  me.  He,  and  those  with  him,  appeared  greatly 
exercised  at  the  presence  of  the  French  Consul- 
General  from  Shanghai,  Monsieur  Bezaure,  who,  I 
was  informed,  was  at  Nanking  on  board  a  French 
cruiser,  endeavoring  to  force  certain  concessions 
from  the  Viceroy. 

I  had  two  interviews,  of  very  considerable  length, 

with  his  Excellency  the  Viceroy,  Liu  Kwen  Yi. 

His  Yamen  is  four  and  one-half  miles  from  the 

landing-place,  and  the  whole  route  was  lined  with 

some  thousands  of  troops  and  banner-bearers.     On 

arrival  at  the  Yamen,  the  Viceroy  received  me 

most  kindly  and  courteously.     I  thanked  him  for 

placing  the  man-of-war  at  my  disposal  in  order  to 

facilitate  the  object  of  my  mission,  and  expressed 



astonishment  at  the  great  ceremony  and  pomp 
with  which  I  was  received.  His  Excellency  re- 
plied that  he  was  anxious  to  show  in  every  way 
his  friendship  for  Great  Britain. 

I  explained  to  the  Viceroy  the  object  of  my 
mission,  and  pointed  out  that  the  mercantile  com- 
munities at  home  were  very  anxious  as  to  the  fut- 
ure security  of  Anglo-Saxon  trade  and  commerce 
in  China.  His  Excellency,  like  the  Viceroy  Chung 
Chi  Tung  at  Hankow,  said  that  he  himself  was 
afraid  of  disturbances  in  the  near  future.  On  my 
asking  him  why,  his  Excellency  gave  me  the  fol- 
lowing reasons : 

1.  That  the  likin  collectorates  had  been  taken 
away  from  the  finances  necessary  for  provincial 
administration,  and  were  now  devoted  to  paying 
the  interests  on  a  foreign  loan :  further  taxation 
would  be  necessary  to  carry  on  the  government. 

2.  That  the  people  were  annoyed  at  their  taxes 
being  paid  to  the  foreigner.* 

3.  Because  it  was  necessary  to  reduce  his  mill- 
tary  forces,  owing  to  want  of  money. 

He  added  that  there  were  a  very  large  number 
of  poor  and  homeless  refugees  coming  into  his 
province  from  the  northern  part  of  Kiangsu,  flooded 
out  by  the  Yellow  River,  and  that  he  had  not 
enough  troops  to  maintain  order  among  them. 

I  pointed  out  to  his  Excellency  that,  under  pres- 
ent conditions,  there  were  two  sorts  of  disturbances 

*  This  inference  is  incorrect.     The  likin  is  only  pledged  as  se- 
curity for  foreign  loans. 



likely  to  occur  in  China,  either  of  which  would  be 
fatal  to  the  interests  of  trade  and  commerce — one 
was  a  rebellion  against  the  Government  in  its 
present  weak  condition,  and  the  other  a  general 
rising  against  the  foreigner.  His  Excellency  de- 
clared that  there  was  no  chance  of  the  former,  but 
that  if  taxes  had  to  be  levied  in  order  to  provide 
for  provincial  administration,  owing  to  deficiencies 
caused  by  the  new  allocation  of  the  likin,  he  was 
certain  there  would  be  disturbances  based  upon 
dislike  of  the  foreigner. 

On  my  suggesting  the  reorganization  of  the 
Chinese  Army  under  British  and  foreign  officers, 
in  order  to  preserve  the  integrity  of  China"  and 
provide  security  for  foreign  trade,  his  Excellency 
at  first  demurred  to  such  a  novel  procedure,  say- 
ing that  he  thought  the  old  system  of  provincial  ar- 
mies, if  properly  organized,  was  far  better.  When 
I  pointed  out  to  him  that  China  had  been  so  com- 
pletely beaten  in  the  late  war  on  account  of  the 
independence  of  her  two  fleets,  the  Peyang  and 
Nanyang  squadrons,  his  Excellency  considerably 
modified  his  opinion. 

His  Excellency  asked  me  to  draw  up  a  memo- 
randum showing  what  I  thought  was  necessary  for 
a  reorganized  Chinese  Army,  as  well  as  details  for 
finance.  This  I  did,  and  later  on  I  received  a  letter 
from  his  Excellency,  thanking  me  very  warmly 
and  intimating  that  he  would  memorialize  his  own 
Government  on  this  matter. 

His  Excellency  informed  me  that  he  was  aware 



that  the  Viceroy  Chung  Chi  Tung  had  been  or- 
dered to  place  2000  men  at  my  disposal  for  or- 
ganization. He  said  that  such  a  proceeding,  if 
carried  out,  would  lead  to  the  dismemberment  of 
China,  as  other  countries  would  insist  on  acting 
similarly  in  various  parts  of  the  Empire. 

He  also  added  that,  in  the  provinces  under  his 
control,  a  short  time  ago  the  name  of  Britain  was 
better  respected  than  that  of  any  other  nation,  but 
that  now  the  name  of  Russia  was  most  feared. 

His  Excellency  took  a  different  view  from  that 
of  other  Viceroys  on  the  question  of  China  asking 
Great  Britain  for  assistance.  He  said  that  Russia 
would  not  allow  China  to  do  anything  of  the  sort. 

His  Excellency  declared  that  personally  he 
would  like  to  see  the  British  with  greater  influ- 
ence in  China,  and  he  pointed  out  the  experience 
that  the  Chinese  already  had  of  British  officials 
serving  as  Chinese  servants.  He  mentioned  Gen- 
eral Gordon  and  Sir  Robert  Hart,  and  said  that 
Chinese  people  could  never  repay  the  debt  their 
country  owed  to  those  Englishmen. 

The  Viceroy  thought  that  a  commercial  under- 
standing between  Great  Britain,  Germany,  Ameri- 
ca, and  Japan  would  go  a  long  way  to  secure  the 
integrity  of  the  Chinese  Empire  in  the  future, 
provided  none  of  those  countries  wished  to  ac- 
quire territory  as  a  quid  pro  quo  for  their  support 

When  asked  if  it  was  possible  that  there  might 

be  disturbances  throughout  the  Chinese  Empire, 

he  said  yes,  that  the  whole  country  was  so  un- 



settled  by  late  events  it  was  possible  there  might 
be  disturbances,  but  no  rebellion.  I  pointed  out 
to  him  that  in  the  event  of  disturbances  the  pros- 
pects of  trade  would  be  very  bad,  and  future  de- 
velopment impossible  for  a  long  time  to  come,  and 
that  if  they  did  occur  it  would  be  more  than  like- 
ly that  foreign  countries  would  perforce  have  to 
adopt  a  policy  known  as  the  Sphere  of  Influence 
in  order  to  protect  their  trade  and  commerce.  The 
Viceroy  remarked  that  if  such  an  event  occurred 
it  would  be  the  end  of  the  Chinese  Empire. 

The  second  interview  with  his  Excellency  was 
chiefly  taken  up  with  a  discussion  on  the  French 
claims  at  Shanghai.  This  I  have  fully  reported 
under  Shanghai.  At  this  interview  his  Excellen- 
cy considerably  modified  his  opinion  with  regard 
to  having  provincial  armies  under  separate  ad- 
ministrations instead  of  one  army  under  one  ad- 
ministration for  the  whole  Empire.  He  said  he 
agreed  with  the  arguments  I  had  adduced  in  the 
memorandum  I  had  sent  him  at  his  request,  and 
that  he  would  memorialize  his  Government  to  or- 
ganize the  Chinese  Army  as  a  whole  under  for- 
eign officers.  He  further  said  he  should  repre- 
sent to  his  Government  that  if  this  was  not  done 
the  Chinese  Empire  would  fall,  as  foreign  coun- 
tries could  not  afford  to  allow  their  trade  and  com- 
merce to  be  damaged  because  the  Chinese  did  not 
provide  them  with  security. 

Before  I  left  Nanking  in  H.I.M.S.  Nanshin, 
Taotai   Hwang  Cheng  Yi  and  Tao  Taotai  and 



Mr.  Ku  and  Marquis  Seng  came  to  see  me,  bear- 
ing messages  of  farewell  from  the  Viceroy  and  a 
letter  containing  a  private  memorandum  concern- 
ing the  reorganization  of  the  Chinese  Army,  a 
copy  of  a  communication  he  was  sending  to  the 
Government  at  Peking.  The  translation  would 
show  the  very  satisfactory  result  of  my  mission  in 
this  case. 

The  Viceroy  asked  me  to  inspect  his  army,  his 
fleet,  the  fort  under  his  command,  his  arsenal,  and 
naval  and  military  colleges. 

A  report  on  the  army,  fleet,  and  arsenal  will  be 
found  elsewhere. 

The  Imperial  Naval  College,  which  I  visited, 
was  commenced  in  the  year  1890.  There  are  sixty 
students,  between  sixteen  and  twenty  years  of  age, 
under  an  English  mechanical  engineer.  The 
school  is  fitted  with  an  excellent  workshop,  with 
all  tools,  machines,  and  appliances  for  repairing 
and  making  boilers  and  engines.  All  these  were 
British  made.  The  students  looked  cheery  and 
well  set  up,  and  were  very  interested  in  their  work. 
I  was  informed  by  Mr.  Halliday,  the  British  in- 
structor, that  they  are  extremely  quick  at  picking 
up  any  sort  of  mechanical  engineering.  At  the 
end  of  their  five  years'  study  they  can  all  talk  Eng- 
lish.   All  the  students  are  sons  of  gentlemen. 

There  are  carpenters'  and  joiners'  shops  also  in 

the  school ;  everything  in  the  whole  establishment 

is  in  excellent  order  and  ship-shape,  and  the  money 

expended  is  well  spent.     It  shows  what  could  be 



done  for  mechanical  trading  development  of  the 
Chinese  if  properly  directed  by  a  foreigner. 

As  the  Chinese  have  no  navy  worthy  of  the 
name,  it  is  a  curious  anomaly  that  they  should 
have  two  such  excellent  colleges  for  naval  officers 
at  Nanking  and  Tientsin, 

I  visited  the  Military  College.  It  was  started 
in  the  year  1895.  There  is  room  for  one  hundred 
and  twenty  students  ;  there  were  only  seventy 
there  at  the  time  of  my  inspection.  They  are  di- 
vided into  three  classes,  according  to  the  status 
of  their  knowledge.  The  first  class  get  six  taels, 
the  second  four  taels,  and  the  third  two  taels  per 
month,  together  with  their  food  and  clothes.  They 
are  all  the  sons  of  gentlemen.  They  remain  there 
three  years,  and  are  then  liable  to  be  drafted  to 
different  armies  about  the  Empire,  but  most  of 
them  go  into  the  Liang  Kiang  provinces  —  i.e., 
those  provinces  under  the  administration  of  the 
Viceroy  Liu  Kwen  Yi. 

I  asked  to  have  them  put  through  company 
formation  and  other  drill  —  they  were  very  good 
indeed.  They  had  been  instructed  by  a  Chinese 
officer,  who  had  originally  been  taught  by  a  Ger- 
man officer. 

They  had  modern  Mauser  rifles,  bought  in  Ger- 
many. They  were  a  remarkably  fine,  smart  lot 
of  young  men,  aged  between  sixteen  and  twenty. 
Most  of  them  came  from  Hunan. 

It  is  another  instance  of  what  may  be  done  by 

the  Chinese,  if  properly  organized. 



A  part  of  the  Budget  is  subscribed  by  the 
Peking  Government.  The  usual  anomaly,  always 
to  be  found  in  China,  exists  with  regard  to  these 
two  colleges.  The  Budget  for  the  Naval  College 
is  a  heavy  one,  though  not  too  heavy  for  what  it 
turns  out.  The  Budget  for  the  Military  College 
is  a  very  light  one.  As  China  has  no  fleet  or 
dock -yard,  it  must  be  waste  of  money  to  train 
naval  officers  so  highly.  It  would  appear  wiser  to 
devote  the  money  on  military  reorganization,  of 
which  the  Empire  is  so  sorely  in  need. 

I  left  Nanking  in  H.I.M.S.  Nanshiuy  on  12th 
December,  and  received  a  salute  from  the  Nan- 
yang  Squadron.  I  proceeded  to  visit  the  power- 
ful forts  on  the  Yangtse  River  at  the  Viceroy's 

Shortly  after  my  departure  from  Nanking  I 
received  the  following  letter  from  his  Excellency 
the  Viceroy,  which  proves  the  interest  taken  by 
his  Excellency  in  British  Trade  and  Commerce. 

Letter  from  Liu,  Viceroy  of  Nanking, 


Admiral  Lord  Charles  Beresford. 

"  A  respectful  reply  to  your  kind  letter.  After  the  honor 
of  your  Lordship's  visit,  when  I  was  so  unable  to  adequately 
carry  out  the  duties  of  a  host,  I  must  express  my  sincerest 
thanks  to  you  that  you  nevertheless  have  had  the  goodness 
to  feel  grateful  to  me,  and  send  me  your  photograph,  which 
will  enable  me  to  always  have  you  near  me,  as  if  we  were  still 

'*  My  heartfelt  wish  is,  that  the  most  friendly  relations  may 
H  113 


exist  between  Great  Britain  and  China,  in  order  that  when 
any  difficulties  may  occur  we  may  be  mutually  helpful  in  ful- 
filling your  noble  idea  that  China  should  preserve  the  integ- 
rity of  her  Empire,  while  England  protects  her  own  commer- 
cial interests. 

*'The  fourteen  suggestions  I  had  the  honor  to  receive  from 
you  regarding  the  training  of  troops  I  have  already  sent  to 
the  Tsung-li  Yamen,  and  to  his  Excellency  Yung-lu,  and  beg 
to  convey  to  you  my  sincerest  thanks  again. 

"  Card  and  Compliments  of  Liu  Kwen  Yi." 


WU  H  U 

The  estimated  population  is  79,275 


The  total  value  of  trade  in  1897  was  Hk.  Taels  8,888,361 
(over  ;f  1,200,000). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  2,867,485,  of  which  2,159,307  was  British. 

WuHU  was  declared  an  Open  Port  by  the  Chefoo 
Convention,  1877.  It  is  situated  on  the  Yangtse 
River,  about  half-way  between  Chingkiang  and 
Kiukiang,  and  owing  to  its  proximity  to  numerous 
waterways  is  certain  to  become  an  important  trad- 
ing centre  if  China  is  opened  up. 

The  British  and  American  merchants  handed 
me  the  following  memorandum :  "  In  order  to  help 
commerce  in  China,  the  doors  already  opened  must 
be  kept  so,  and  the  whole  country,  from  one  end 
to  the  other,  should  be  thrown  open,  so  that  mer- 
chants, manufacturers,  miners,  etc.,  can  live  in  any 
part  and  transact  their  business.  If  this  was  done, 
the  trade  of  Europe  and  America  would  treble  in 
a  very  short  time. 

The  British  community  here  expressed  them- 



selves  as  nervous  with  regard  to  disturbances  in 
the  near  future,  the  people  having  begun  to  grum- 
ble  at  the  likin  being  collected  by  the  foreigner. 

The  British  and  American  communities  were 
anxious  that  the  foreign  concession  should  be  ex- 
tended in  area. 

There  is  a  large  trade  in  timber  from  Hunan 
here,  and  the  rafts  do  much  damage  to  the  front 
of  the  present  small  concession.  They  often  carry 
away  the  cables  of  the  hulks  lying  in  the  stream. 
This  timber  trade  is  in  the  hands  of  the  Chinese. 

There  is  much  coal  in  the  locality;  but  I  was 
told  that  the  natives  do  not  work  it  with  any  profit 
to  themselves.  A  Chinese  firm  have  started  a 
mine,  with  a  capital  of  22,000  taels  (over  ;^300o), 
but  it  is  not  paying.  There  is  a  range  of  moun- 
tains about  forty-five  miles  from  Wuhu  which  is 
full  of  coal.  Some  of  the  properties  there  have 
been  bought  by  Americans  and  English ;  but  un- 
less the  obstructive  attitude  of  the  local  Chinese 
authorities  is  overcome  there  is  no  chance  of  this 
property  being  developed  at  present. 

On  my  second  visit  to  Wuhu  I  found  that  his 
Excellency  the  Viceroy  of  Nanking,  Liu  Kwen  Yi, 
had  sent  his  principal  provincial  officers,  Taol  Sen 
Kia,  Ku  Chih  Yen,  and  Tung  Tai,  in  a  man-of- 
war  cruiser,  the  Nanshiuy  to  place  the  vessel  at  my 
disposal  for  as  long  a  time  as  I  might  find  con- 
venient. On  my  embarking  on  board  H.I. M.S. 
Nanshin  a  salute  of  fifteen  guns  was  fired.     In 

this  vessel  I  proceeded  to  Nanking. 




The  estimated  population  is  53,101 


The  total  value  of  trade  in  1897  was  Hk.  Taels  14,865,563 
(over  ;f  2,100,000). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  2,656,552,  of  which  2,004,298  was  British. 

KiUKiANG,  a  port  situated  on  the  Yangtse 
River,  near  the  outlet  of  the  Poyang  Lake,  is  some 
185  miles  distant  from  Hankow,  and  445  miles  from 

There  is  a  small  British  and  American  com- 
munity. The  principal  export  is  black  tea,  which 
is  in  the  hands  of  two  Russian  merchants.  An- 
other tea  is  a  peculiar  sort  of  green  tea,  and  I  was 
told  that  the  total  export  is  declining. 

There  was  an  excellent  feeling  between  the  Eng- 
lish and  Americans,  both  of  whom  were  strongly 
in  favor  of  maintaining  the  "  Open  Door." 

I  was  received  by  a  deputation  of  residents,  who 
handed  me  certain  resolutions  {vide  Appendix). 
They  were  particularly  anxious  that  a  British  Con- 



sul  should  be  sent  to  Changsha — a  wish  that  was 
expressed  at  many  other  places  that  I  visited. 

To  show  how  little  chance  there  is  at  present 
for  developing  trade  by  opening  up  the  mineral 
resources  of  China,  I  quote  the  following  case : 

A  British  subject  had  bought  a  property  in  the 
locality  containing  coal.  His  title  and  register  are 
not  contested;  they  bear  the  stamp  of  the  Ya- 
men.  On  this  gentleman  asking  for  permission 
to  work  the  coal,  the  Taotai  of  the  locality  refused, 
giving  as  his  reason  that  the  working  of  coal-mines 
was  not  provided  for  in  the  Treaty. 

The  people  of  the  district  are  perfectly  agree- 
able that  this  gentleman  should  open  up  and  work 
the  mine.  Some  of  the  Chinese  themselves  are 
deriving  a  good  income  near  here  by  working 
surface  coal. 

There  is  a  company  composed  of  English  and 
American  residents  here,  and  at  Wuhu,  who  have 
bought  certain  mining  properties,  and  are  in  pos- 
session of  the  Chinese  deeds  duly  executed  and 
stamped  by  the  local  native  authorities  with  the 
official  seal.  One  of  these  deeds  states  that  the 
properties  were  bought  for  mining  purposes,  and 
the  other  states  that  the  properties  may  be  put  to 
any  use  the  owner  likes,  yet  the  senior  provincial 
authority  will  not  allow  these  gentlemen  to  work 
their  mines.  This  is  another  case  which  shows 
how  necessary  it  is,  if  trade  is  to  be  developed,  to 
secure  by  treaty  such  rights  and  privileges  as  will 
permit  capital  to  be  invested. 



This  port  might  increase  its  trade  very  consider- 
ably if  light -draught  steamers  and  launches  for 
towing  were  put  on  the  Poyang  Lake  and  the 
tributary  rivers,  which  would  open  up  the  adjacent 
district  and  allow  goods  to  be  water-borne  from  the 
province  of  Kiangsi. 



The  estimated  population  is  135,220 


The  total  value  of  trade  in  1897  was  Hk.  Taels  24,145,341 
(over  ;£^3,4oo,ooo). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  3»S3S»739»  ©^  which  2,353,702  was  British. 

Chinkiang,  which  was  declared  open  to  foreign 
trade  by  the  Treaty  of  Tientsin  in  1858,  is  an  im- 
portant city,  owing  to  its  position  on  the  Yangtse 
River  and  proximity  to  the  Grand  Canal.  But  full 
advantage  of  this  position  is  not  taken. 

An  account  of  the  Grand  Canal,  the  present  con- 
dition of  which  affects  the  trade  of  Chinkiang,  will 
be  found  in  the  chapter  on  "  Waterways." 

Having  asked  the  Chamber  of  Commerce  at  Chin- 
kiang to  supply  me  with  a  memorandum  showing 
their  views  as  to  what  they  considered  necessary 
for  the  further  development  of  British  trade,  in 
order  that  I  might  transmit  these  views  to  the  As- 
sociated Chambers  of  Commerce,  they  presented  me 
with  the  following  lucid  and  practical  suggestions, 

which  I  append  in  their  entirety : 



"  Memorandum  regarding  Trade  and  other  mat- 
ters for  presentation  to  Lord  Charles  Beresford, 
C.B.,  M.P.,  by  the  Chinkiang  Chamber  of  Com- 

"TRADE    OF    THE    PORT 

"The  value  of  the  trade  of  the  Port  for  1897 
was  Hk.  Tls.  24,000,000. 

"Revenue Hk.  Tls.  8ii»ooo 

"Transit  Dues "        197,000 

"An  important  feature  in  the  trade  of  Chin- 
kiang is  the  distribution  of  foreign  goods  under 
the  transit-pass  system. 

"Cities  in  the  provinces  of  Kiangsu,  Anhui, 
Kiangsi,  Shantung,  and  Honan  are  supplied  from 
this  centre. 

"  The  port  may  claim  always  to  have  held  the 
premier  position  among  Treaty  Ports  in  this 
branch  of  trade,  and  of  the  total  transit  dues  col- 
lected last  year  about  25  per  cent,  were  received 
at  Chinkiang. 

"Commencing  in  1868,  through  the  energy  of  a 
British  merchant,  when  H.M.'s  war  vessels  were  at 
Nanking,  the  system  has  year  by  year  continued 
to  flourish,  in  spite  of  illegal  exactions  and  not  in- 
frequent detentions  of  cargo  en  route. 

"  The  other  branch  of  the  transit -pass  system, 
that  by  which  goods  are  brought  from  the  in- 
terior, influences  in  no  small  degree  the  general 

exports.     The  rules  in  vogue  here  are  peculiar 



to  the  port,  and  are  known  as  *The  Chinkiang 

"  Specially  framed  to  admit  of  foreigners  being 
interested  in  native  business,  the  system  works 
satisfactorily,  but  certain  restrictions,  the  most 
important  of  which  is  the  arbitrary  limitation  of 
articles,  require  modification. 

"  It  is  a  matter  for  regret  that  it  is  the  custom 
of  H.M/s  Consuls  to  minimize  the  importance  of 
this  branch  of  the  system. 

"  It  appears  to  the  Chamber  that  if  China  is  to 
take  British  goods  on  an  increased  scale,  her  ex- 
port trade  must  be  largely  developed,  and,  with 
the  assistance  of  inland  navigation,  this  can  in  no 
way  be  better  accomplished  than  by  the  fostering 
and  extension  of  the  outward  transit-pass  system. 


"  British  merchants  here  having  been  the  first 
in  the  field  in  China  to  take  advantage  of  this 
most  important  concession  so  ably  secured  by 
H.M.'s  Minister,  prominence  is  given  to  the 

"  After  meeting  with  considerable  opposition  at 
the  hands  of  the  officials,  from  the  Viceroy  down- 
ward, permits  were  granted  to  run  launches  in 
inland  waters  on  the  2 2d  June,  1898. 

"  The  route  first  selected  was  to  Tsing-kiang-pu, 

an  important  trade  centre  on  the  Grand  Canal, 

distant   some    120   miles   north   from   this   port. 



Later,  launches  were  despatched  to  Soochow,  the 
capital  of  the  province  of  Kiangsu,  situated  at 
about  a  similar  distance  on  the  southern  section 
of  the  canal. 

"  Other  routes  leading  to  large  marts  by  adja- 
cent waterways  have  also  been  selected  and  are 
being  worked. 

"  In  all  some  thirty  launches  under  flags  of  vari- 
ous nationalities  are  engaged. 

"  While  it  was  fully  expected  the  natives  would 
heartily  welcome  a  quick  means  of  transit,  the  re- 
sults have  exceeded  general  expectations.  During 
four  months,  returns  give  the  number  of  passen- 
gers arriving  at  and  leaving  the  port  as  60,000, 
but  these  figures  are  considered  under  the 
mark,  and  probably,  with  the  wayside  traffic  in- 
cluded, the  total  number  can  be  little  short  of 

"  It  is  an  important  feature,  however,  that 
up  to  the  present  time  no  cargo  has  been  con- 

"  Trade  during  the  year  has,  from  various  causes, 
been  exceedingly  dull,  but  probably  the  principal 
reason  this  branch  of  the  business  has  not  been 
availed  of  is  the,  as  yet,  incomplete  system  of  rules, 
the  administration  of  which  is  not  yet  effective. 
Certain  regulations  regarding  duties,  etc.,  are  to 
be  published  before  the  end  of  next  January,  from 
which  good  results  are  hoped. 

"  It  is  to  be  pointed  out  that  Rule  7  (Regula- 
tions [amended],  1898)  provided  that  steamers  are 



only  permitted  to  tow  on  the  Yangtse  under  spe- 
cial Customs  papers,  and  it  is  suggested  this  clause 
should  be  struck  out. 

"  Mention  should  be  made  of  a  trial  shipment 
of  oil  by  a  British  merchant  under  transit -pass 
last  July,  consigned  to  Tsing-kiang-pu.  The  voy- 
age lasted  twenty-five  days,  whereas  it  should  only 
have  occupied  forty  hours.  All  along  the  line 
exactions  were  demanded,  and  detentions  ensued. 
At  the  Huai-kuan  barrier,  near  Tsing-kiang-pu, 
aptly  described  as  the  greatest  hinderance  to  trade 
in  North  China,  the  'Shroff'  in  charge  was  subject 
to  gross  outrage,  the  circumstances  of  which  were 
reported  to  H.M/s  Minister.  It  is  clear  to  all  who 
have  made  a  study  of  trade  in  this  and  adjoining 
provinces  that  the  administration  of  affairs  at  this 
barrier  should  form  the  subject  of  strong  repre- 

"It  is  considered  important  that  pressure  should 
be  brought  to  bear  on  the  officials  for  the  better 
preservation  of  the  Grand  Canal. 

"  Between  Chinkiang  and  Soochow,  in  the  best 
season,  difficulties  in  passage  are  met,  and  for  the 
greater  part  of  the  year  launches  drawing  only 
three  feet  are  unable  to  get  over  shoal  parts.  The 
northern  section  is  in  a  somewhat  similar  condi- 
tion,and  for  want  of  slight  dredging  launch  traf- 
fic will  here  probably  be  interfered  with  for  four 
months  in  the  year. 

"  As  an  enormous  revenue  is  set  apart  annually 

for  the  preservation  of  the  Canal,  and,  in  addition, 



tonnage  dues  are  paid  by  launches,  it  is  urged  that 
representations  be  made. 

"On  the  28th  June,  1898,  rioting  occurred  at 
Yangchow,  distant  about  fifteen  miles,  and  other 
places  in  connection  with  the  launches.  It  was 
stated  that  trouble  originated  with  discontented 
boat  people,  but  it  was  abundantly  proved  that  the 
authorities,  if  not  actively  abetting,  certainly  con- 
nived at,  the  attack  and  pillage  on  launches  and 
passenger  stations. 

"  H.M.'s  Minister,  acting  with  promptitude,  ar- 
ranged  for  the  despatch  of  a  man-of-war  to  this 
port,  and  on  the  arrival  of  H.M.S.  Phcenix,  Cap- 
tain Cochran,  with  Messrs.  Scott  and  Twyman, 
had  an  interview  with  the  Taotai,  who  at  once 
guaranteed  security  from  further  trouble  and  a 
speedy  settlement  of  claims  for  compensation. 
These  latter,  although  amounting  to  a  quite  insig- 
nificant sum,  are  still  unpaid. 


'*  British  merchants  complain,  and   it  appears 

with  justice,  that  they  are  at  a  great  disadvantage 

in  being  prevented  from  flying  the  national  flag  on 

all  launches,  whether  owned  or  chartered.     It  is 

contended  that  the  chartering  of  vessels  by  British 

merchants  should  entitle  them  to  all  privileges, 

and  at  a  time  when  British  prestige  should  be 

strongly  maintained  in  this  region  of  the  Yangtse 

Valley,  and  the  British  flag,  as  far  as  possible,  be 



predominant,  it  is  urged  that  rules  bearing  on  the 
matter  should  receive  a  liberal  interpretation  at 
the  hands  of  H.M.'s  Consuls. 


"  It  is  abundantly  clear  that  the  area  of  the 
British  Concession  in  Chinkiang,  only  some  700,- 
000  square  feet,  is  too  limited  for  the  purposes  of 
residence  and  trade,  and  an  extension  in  the  form 
of  a  Settlement  is  urgently  required,  in  order  that 
foreigners  may  have  space  for  manufactures  and 
the  preparation  of  raw  material  for  export.  Re- 
garding the  acquisition  of  sites  for  residences  on 
adjacent  hills,  the  local  authorities  have  ever 
maintained  a  hostile  attitude,  and  it  is  to  be  re- 
gretted that  H.M.'s  Consuls  are  unable  to  remedy 


"As  regards  the  better  development  of  trade  in 
China,  having  now  secured  the  right  to  navigate 
inland  waters,  the  next  and  most  important  step 
appears  to  the  Chamber  to  be  the  abrogation  or 
modification  of  the  restrictions  relating  to  foreign 
residence  in  the  interior. 

"  In  no  other  manner,  it  would  seem,  can  for- 
eign trade  be  so  satisfactorily  pushed,  and  goods 
reach  the  consumer  free  of  illegal  and  local  exac- 
tions.    At  the  present  time  great  obstruction  is 

being  offered  in  certain  districts  in  the  province 



of  Kiangsu  to  the  circulation  of  British  goods  by 
an  enforced  exaction  termed  *  loti,'  or  what  may 
be  described  as  a  Maying  down  tax.'  If  this  is 
permitted  unchecked,  the  benefits  of  the  transit- 
pass  system  disappear.  Nothing  can  better  illus- 
trate the  necessity  of  foreigners  themselves  ac- 
quiring the  right  to  reside  in  the  interior  and 
establish  their  own  places  of  business. 


"  The  canal  route  between  the  Treaty  Ports  of 
Chinkiang  and  Soochow  should,  it  is  suggested, 
be  thrown  open  as  an  international  route. 


"  The  proposed  revision  of  the  Yangtse  Rules 
and  Regulations  appears  to  have  been  unneces- 
sarily delayed. 

"  The  Chinkiang  Pass,  a  frequent  cause  of  vex- 
atious detention  to  shipping,  should  be  abolished, 
and  it  is  suggested  that  the  compulsory  payments 
of  duties  on  foreign  goods  at  Shanghai  destined 
for  River  Ports  should  be  altered,  also  that  the 
collection  of  duties  as  between  the  River  and 
Coast  should  be  assimilated. 


"An  arrangement  which  appears  to  have  official 

sanction  permits  the  products  of  native  mills  in 



Shanghai  to  be  sent  into  the  interior  under  a  Free- 
Transit  Pass,  an  Import  duty  having  first  been 
paid.  The  passes  are  issued  at  the  mills  in  an 
irregular  manner  under  the  authority  of  Taotai 

"As  a  like  privilege  is  denied  by  the  I.  M.  Cus- 
toms to  products  of  the  foreign  mills,  it  is  urged 
that  the  injustice  should  be  represented;  consid- 
erable quantities  of  the  native  goods  are  going 
inland  here  under  the  above  favorable  conditions. 


"From  time  to  time  this  Chamber  has  felt  it 
incumbent  to  ventilate  this  important  matter. 

"  Taking  a  period  of  three  years  to  last  Septem- 
ber, it  is  found  that  officials  in  charge  of  H.M.  s 
Consulate  have  been  changed  no  less  than  twelve 
times.  Such  a  condition  of  things  precludes  sus- 
tained effort  to  promote  the  welfare  of  British  mer- 
chants. H.M.'s  Consuls  appear  averse  to  take  up 
mixed  cases  on  behalf  of  merchants,  and,  if  such 
are  commenced,  to  press  for  settlement. 

"It  is  not  unusual  for  matters  arising  out  of 
flagrant  breaches  of  the  transit-pass  regulations  to 
hang  over  for  years,  the  patience  of  the  merchant 
being  thus  probably  exhausted,  in  addition  to 
which  the  transit-pass  system  suffers  in  reputa- 

"  Reference  has  been  made  to  certain  claims  by 

British  merchants  in  respect  of  the  launch  riots  in 



June.  In  spite  of  H.M.'s  Consul  having  specific 
instructions  from  H.M.'s  Minister  that  these  claims 
are  to  be  satisfied,  they  are  permitted  to  drag  on 
month  by  month.  In  a  case  such  as  this  the  entire 
absence  of  a  firm  demand  to  the  officials  is,  in  the 
Chamber's  opinion,  all  that  stands  in  the  way  of  an 
immediate  settlement. 


"  Here,  at  Chinkiang,  the  relations  between  the 
Consul  and  the  native  authorities  appear  to  call 
for  comment 

"  Practically  all  the  business  relating  to  British 
subjects  and  Chinese  is  carried  on  between  the 
Consul  and  a  Wei-yuan,  locally  styled  the  *  Foreign 
Business  Deputy.'  Some  years  ago  the  present 
incumbent  was  employed  as  writer  in  the  British 
Consulate,  from  which  post  he  was  dismissed. 

"  With  a  change  of  Consul  the  man  was  quietly 
invested  with  the  office  above  described,  partly 
owing  to  his  knowledge  of  foreign  affairs,  but 
chiefly  it  would  appear  as  a  studied  insult  to  the 
Consulate.  He  has  since  been  received  by  H.M.'s 
Consul,  and  in  return  receives  him. 

"He  systematically  delays  all  business  to  his 
own  advantage,  and  at  times  important  matters  he 
is  supposed  to  represent  to  the  Taotai  do  not  go 
further  than  that  ofiicial's  permanent  secretary — 
one  Wu-shu-ping — the  most  notoriously  anti-for- 
eign Chinese  in  the  port.  This  man  for  the  past 
I  129 


ten  years  has  persistently  retarded  and  obstructed 
every  Consular  case  put  before  the  Taotai;  his 
conduct  is  now  specially  noticeable,  as  the  present 
Taotai  is  a  Manchu,  and  has  had  no  experience  of 
foreign  officials. 


"  With  railways,  in  the  near  future,  converging 
at  Chinkiang  from  the  north  and  the  south,  com- 
bined with  the  undoubted  success  which  must  at- 
tend the  navigation  of  inland  waters,  towards  the 
prosecution  of  which  the  situation  of  this  port  pe- 
culiarly lends  itself,  the  Chamber  has  every  con- 
fidence in  the  future  prosperity  of  Chinkiang. 


"  The  suggestions  now  submitted  for  considera- 
tion are : 

"  I.  Strict  and  immediate  enforcement  of 
the  inland  navigation  rules. 

"  2.  Right  of  foreigners  to  reside  in  the  in- 
terior, unfettered  as  regards  trade,  and  to  buy 
land  in  the  vicinity  of  Treaty  Ports. 

"  3.  Amelioration  of  condition  of  certain  bar- 
riers in  Kiangsu,  notably  that  at  Huaikuan,  on 
the  Grand  Canal. 

"  4.  Revision  of  the  Yangtse  Regulations. 

"5.  A  more  hearty  and  willing  co-opera- 
tion on  the  part  of  H.M.'s  Consuls  for  the 



furtherance  of  trade  and  protection  of  British 
"  The  Committee  of  the  Chinkiang  Chamber  of 

"  E.  Starkey,  Chairman. 
"  F.  Gregson,  Hon.  Secretary. 
^"^  November  22,  1898." 

The  points  I  should  like  to  comment  upon  in 
this  memorandum  are  the  following : 

The  excellent  position  this  port  holds  with  re- 
gard to  the  transit  system  of  foreign  goods,  owing 
to  the  energy  of  a  single  British  merchant  as  far 
back  as  the  year  1868. 

A  further  instance  of  the  energy  of  the  British 
was  shown  in  the  fact  that  they  managed  to  force 
their  right  to  run  launches  on  the  waterways,  not- 
withstanding the  opposition  of  authority,  with  tri- 
umphant result  as  far  as  increase  of  traffic  is  con- 

The  incident  referred  to,  which  took  place  on 
June  28,  1898,  regarding  riots  of  Yangchow  in 
connection  with  the  starting  of  steam-launches, 
is  worthy  of  great  attention,  as  it  shows  how  Brit- 
ish gunboats  on  the  Yangtse  would  further  the 
development  of  trade  and  commerce  by  assisting 
the  Viceroys  and  authorities  to  stop  or  prevent 
disturbances,  such  disturbances  being  fatal  to  trade 
and  commerce. 

In  this  Report  I  have  frequently  called  the  at- 
tention of  the  Associated  Chambers  of  Commerce 



to  the  necessity  of  placing  British  floating  patrols 
on  the  waterways.  This  will  not  only  secure  the 
development  of  trade,  but  it  will  place  the  British 
in  the  position  of  being  first  in  the  field,  a  not  un- 
important matter,  with  equal  opportunity  to  all. 

Moreover,  it  would  not  be  a  selfish  policy,  as 
the  British  gunboats,  by  giving  security,  would 
really  help  the  trade  development  of  all  nations. 

British  prestige  was  at  a  low  ebb  all  through 
China  at  the  places  I  visited ;  not  one,  but  every 
Chinese  authority  I  spoke  to  continually  referred 
to  the  fear  with  which  Britain  regarded  Russia. 

The  suggestion  as  to  the  right  of  residence  be- 
ing permitted  is  one  of  the  utmost  importance  for 
the  development  of  Anglo-Saxon  trade,  and  has 
been  frequently  alluded  to  in  this  Report. 

With  regard  to  the  fact  mentioned  in  the  memo- 
randum of  the  loti-shui  tax  in  Kiangsu,  this  tax  is 
distinctly  against  Treaty,  and  steps  should  be  im- 
mediately taken  to  remove  this  great  obstruction 
to  trade. 

With  regard  to  the  free-transit  pass  being  per- 
mitted for  products  from  the  native  mill  at  Shang- 
hai, this  privilege  has  lately  been  revoked,  with 
the  result  that  one  or  two  of  the  native  mills  in 
Shanghai  had  stopped  working  while  I  was  there. 

The  merchants  appeared  to  me  to  have  just 
cause  of  complaint  at  the  unnecessary  delay  over 
the  revision  of  the  Yangtse  Rules  and  Regulations, 
but  since  my  departure  this  matter,  I  am  informed, 
has  been  at  last  settled. 



The  remarks  in  the  memorandum  concerning 
those  in  charge  of  H.B.M/s  Consulate  at  Chin- 
kiang  appear  somewhat  drastic.  I  found  that  the 
Consuls  had  been  changed  twelve  times  in  three 
years,  which  would  probably  give  good  reason  for 
British  subjects  to  complain  that  their  trading  in- 
terests do  not  receive  that  attention  which  they 
should  command. 

With  regard  to  the  complaint  made  by  the 
Chamber  of  Commerce  as  to  the  relations  between 
the  present  British  Consul  and  the  Chinese  Official 
called  the  "  Foreign  Business  Deputy,"  I  informed 
those  gentlemen  that  I  could  not  take  uj)  this 
question;  that  the  proper  procedure  for  them,  if 
they  thought  H.B.M.'s  Consul  was  neglecting  their 
trading  interests,  was  to  write  a  letter  of  protest 
to  the  Consul,  setting  forth  clearly  what  their  com- 
plaint was,  and  to  forward  a  copy  of  the  letter  and 
reply  to  the  British  Minister  at  Peking.  This 
procedure  appeared  to  me  to  be  fair  to  the  British 
Consul  as  well  as  to  the  merchant. 

I  found  a  steady  but  decided  decline  in  the 
trade  of  this  port,  and  asked  the  British  merchants 
if  they  could  give  me  a  reason  for  this.  They  sent 
me  the  following  memorandum: 


"Trade,  1898 

"  During  the  nine  months,  ending  September 
30th,  there  has  been  a  steady  decline  in  the  trade 

of  the  port. 



"  Foreign  imports,  which  may  be  considered  a 
reliable  index,  have  su£Eered  all  round. 

Opium  ....    decrease  .    .     Taels  150,000 

Cotton  goods .     .    .      '^  ...  1,100,000 

Woollen     ....      "  ...  100,000 

Sundries     ....      "  ...  500,000 

(jC^ITiOoo)     Taels  1,850,000 

"  The  value  of  foreign  imports  for  the  whole  of 
1897  was  i3,ocxD,ooo  taels. 

"  The  transit-pass  trade  has  naturally  declined 
in  sympathy,  the  number  of  passes  issued  being 
nearly  1000  less  than  during  the  corresponding 
period  in  1897. 

"  Exports  also  show  a  considerable  decline  in 
value,  of  which,  as  directly  regards  foreign  trade, 
silk,  hides,  and  wool  may  be  mentioned. 

**  Transit  passes  surrendered  for  cargo  brought 
from  the  interior  are  750  less  than  the  number  for 
the  corresponding  period  last  year. 

"  In  this  branch  of  trade  British  merchants  are 
at  a  disadvantage  as  compared  with  American 
merchants,  in  consequence  of  exemption  of  fees." 

[This  question  is  thoroughly  ventilated  under 
chapter  on  "  Consuls."] 

"  The  factors  which,  in  the  opinion  of  the  Com- 
mittee, have  contributed  to  the  decline,  may  be 
classed  under  three  headings,  viz. : 

"(a)  Insecurity,  owing  to  political  compli- 



"  (6)  Scarcity  of  capital. 
"  (c)  Floods  in  Shantung, 
"(a)  Creating  serious  uneasiness,  showing  no 
signs  of  abatement,  and  most  prejudicial  to  trading 

"  (6)  The  scarcity  of  money,  which  is  very  real 
and  apparent,  has  arisen  from  various  causes,  chief- 
ly, however,  connected  with  the  political  situation. 
"  I.   Extensive    withdrawals    from    native 
banks  by  wealthy  depositors. 

"  2.  Enforced  *  loans '  from  the  wealthy 
classes  by  the  Government  to  pay  off  the 
Japanese  war  indemnity. 

"  3.  Further  exactions  for  special  purposes 
at  Peking. 

"4.  Curtailing  of  current  loans  to  native 
banks  by  foreign  banks, 
"(r)  The  provinces  of  Shantung  and  Honan, 
which  take  a  large  portion  of  goods,  have  suffered 
largely  from  the  disastrous  Yellow  River  floods, 
in  which,  it  is  reported,  millions  of  people  have 
lost  their  lives.  Districts  are  infested  by  robbers, 
against  whom  there  is  no  protection,  and  it  is 
quite  unsafe  to  move  either  goods  or  treasure. 

"  It  should  be  added  that  native  trade  is  disor- 
ganized by  the  arbitrary  and  unreasonable  period- 
ical prohibitions  of  movement  of  grain ;  and  this  in 
turn  reacts  seriously  on  British  shipping  interests. 

F.  Gregson, //i7».  i&^. 
"  Chinkiang  Chamber  of  Commerce, 
''December,  1898." 


^  I 


There  is  a  (large)  export  from  this  place  of  goat- 
skins, silk,  hides,  and  wool. 

There  are  two  silk  filatures  and  one  albumen 
factory  (German),  and  a  cotton-mill  in  course  of 
erection,  with  Chinese  capital  and  management 

Besides  foreign  trade,  there  is  a  large  local  trade 
between  Hankow  and  intermediate  ports.  This  is 
a  native  trade,  but  it  is  carried  principally  in  Brit- 
ish steamers.  The  Japanese  have  two  steamers  in 
this  trade.  They  are  at  an  advantage,  being  sub- 
sidized by  their  Government  Being  small,  they 
are,  however,  not  serious  rivals  ;  but  I  heard  that 
there  is  to  be  an  increase  in  their  number  this  year. 
The  Germans  are  about  to  start  a  line  of  steamers 
for  this  trade.  The  British  merchants  say  that 
these  steamers  are  to  be  subsidized  also. 

The  merchants  here  were  of  opinion  that  what 
was  immediately  wanted  to  develop  trade  was 
steam-launches  for  towing  in  the  interior  water- 
ways, as  that  would  prevent  the  obstruction  and 
squeezes  at  present  so  easily  affected  on  sailing- 

Here  again  I  was  impressed  with  the  necessity 
for  patrol  boats.  The  likin  coUectorate  having 
been  allocated  for  the  service  of  foreign  loans,  pro- 
vincial officials,  it  was  said,  would  certainly  attempt 
higher  squeezes  to  cover  deficiencies  in  finance  for 
provincial  administration. 

On  my  second  arrival  at  Chinkiang,  on  board 

the  Chinese  cruiser  Nanshin,  I  was  received  with 

a  salute  of  fifteen  guns,  and  the  principal  native 



authorities  visited  me.  Among  these  authorities 
was  the  Admiral  of  the  Yangtse,  Hwang  by  name, 
a  most  intelligent  official,  a  Hunanese.  He  seemed 
a  thoroughly  patriotic  Chinaman,  and  was  most 
anxious  for  the  future  of  his  country.  He  dwelt 
particularly  on  the  complete  want  of  organization 
of  the  Chinese  force  during  the  late  war  with 
Japan,  and  told  me  that  he  himself  had  seen  pistol 
ammunition  supplied  to  men  with  rifles.  On  my 
pointing  out  to  Admiral  Hwang  the  necessity  for 
China  to  organize  her  army  as  a  whole  if  she 
wished  to  maintain  her  integrity,  and  also  that  if 
Great  Britain  was  asked  to  assist  her  it  is  possible 
she  (Great  Britain)  would  consider  the  question 
for  the  security  of  her  own  trade  and  commerce, 
he  remarked  that  he  wished  it  could  be  so,  but  he 
was  certain  that  Great  Britain  would  never  insist 
on  helping  China  if  Russia  raised  an  objection.  He 
also  said  that  he  considered  that  his  country  had 
been  given  away  to  Russia. 

I  visited  all  the  forts  situated  in  the  locality,  an 
account  of  which  will  be  found  in  the  chapter  on 
"  Forts  and  Arsenals." 



I  STOPPED  a  few  hours  at  Kiangzin  before  pro- 
ceeding to  examine  the  forts  and  inspect  the  troops 
in  that  district. 

I  had  an  interview  with  General  Li,  a  very  dis- 
tinguished soldier,  who  wore  the  yellow  jacket. 

On  discussing  the  future  security  for  Anglo- 
Saxon  trade  and  commerce,  he  expressed  great  anx- 
iety. He  said  that  on  account  of  the  scarcity  of 
money  he  had  been  obliged  to  disband  many  of  his 
men,  and  would  have  still  further  to  reduce  them. 
He  said  it  would  be  impossible  to  impose  further 
taxes,  as  disturbances  would  certainly  accrue. 

He  expressed  himself  as  very  unhappy  about 
the  future  of  his  country,  and,  on  my  making  the 
proposal  relative  to  the  British  helping  to  put  the 
Chinese  Army  in  order,  he  said  he  was  afraid  it 
never  could  be  done,  that  Russia  would  object,  and 
that  England  was  like  an  old  man  with  plenty  of 
money,  who  risks  nothing  to  provoke  a  disturbance, 
knowing  that  he  has  neither  the  energy  nor  the 
power  to  protect  his  riches. 



The  estimated  population  is  800,370 

The  total  value  of  trade  in  1897  was  Hk.  Taels  49,720,630 
(over  ;f  7, 100,000). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  1,783,042,  of  which  1,109,853  was  British. 

I  FOUND  the  British  community  very  anxious 
as  to  the  future  security  of  Anglo-Saxon  trade 
and  commerce  in  this  city,  owing  to  the  lack  of 
military  and  police,  both  in  number  and  efficiency, 
in  its  adjacent  provinces.  Disturbances  had  al- 
ready broken  out  in  the  province  of  Szechuan,  and 
the  merchants  had  received  intimation  that  there 
would  be  determined  resistance  offered  to  any 
attempt  to  develop  Anglo-Saxon  trade  in  the  vast- 
ly rich  province  of  Hunan,  through  the  Tung 
Ting  Lake  and  tributaries.  Although  the  water- 
ways have  been  thrown  open,  there  is  no  direct 
foreign  trade  at  present  with  this  rich  province. 
The  situation  in  Szechuan  is  fully  explained  by  a 
letter  which  arrived  at  the  British  Consulate  while 

I  was  at  Hankow  in  the  beginning  of  December. 



The  following  copy  of  this  letter  is  here  ap- 
pended : 

"You  have  probably  heard  by  this  time  that 
Fleming  of  C  I.  M.  was  murdered  4th  November 
at  Pang  Hai,  300  li  east  of  Kwei  Yung  Fu.  I 
only  heard  the  i6th,  the  wire  having  taken  six 
days  from  Kwei  Yung  Fu  here,  and  even  now  I 
am  quite  without  details,  though  I  have  little  doubt 
it  was  the  work  of  a  band  of  brigands  who  have 
been  pillaging  and  vowing  vengeance  on  the  for- 
eigner  in  those  parts.  The  bad  characters  have 
been  much  stirred  up  by  Yu  Man  Tsu's  proclama- 
tions, and  the  Kwei  Chou  officials  have  been  doing 
nothing  at  all  to  stop  the  trouble.  You  may  very 
possibly  be  getting  news  of  that  part  of  the  world 
quicker  than  I,  via  the  Yuan  Riven  Where  is 
Wingate  t  he  was  to  pass  that  way,  and  I  am  very 
anxious  about  him.  It  would  have  been  much 
safer  for  him  to  come  this  way. 

"  Yu  Man  Tsu  has  gone  home  to  Ta  Tsu  with 
his  bands,  now  equal  to  about  io,ocxD  men,  laden 
with  the  spoil  of  all  the  rich  Catholics  of  Central 
Szechuan,  over  4000  houses  burned,  including 
about  thirty  Mission  chapels,  over  20,000  Catholics 
homeless  and  destitute,  and  damages  at  least 
6,000,000  taels  (over  ;^850,ooo).  What  is  to  hap- 
pen, or  how  it  is  to  be  paid,  I  cannot  tell !  At 
present  the  rebels  are  quiet,  and  are  being /^j^-o^  by 
the  Cheng  Tu  officials,  who  have  not  taken  a  step 
to  suppress  them,  or  to  prevent  pillage  and  murder. 

It  is  a  most  melancholy  a£Eair,  and  has  dealt  a 



blow  to  foreigners  from  which  they  will  not  re- 
cover for  years.  Of  course  the  matter  is  not  de- 
cided at  all  yet.  The  rebels  may  break  out  again 
at  any  moment  that  the  Cheng-tu  people  do  not 
pay  them  enough.  They  have  utterly  destroyed 
all  the  Catholics  in  Central  Szechuan,  and  will 
have  to  begin  on  the  heathen  now.  Hitherto 
they  have  only  levied  contributions  on  these  latter. 
The  new  Treasurer  and  Viceroy  have  come  at 
last.  The  former  seems  a  good  man,  but  he 
brings  no  troops,  and  good  troops,  used  with  deci- 
sion and  energy,  are  the  only  solution  of  the  ques- 

It  may  be  interesting  to  insert  here  the  origin 
of  the  Yu  Man  Tsu  disturbances.  Twelve  years 
ago  there  was  a  dispute  about  land  between  Yu 
Man  Tsu,  a  wealthy  Chinese,  and  a  Christian 
Catholic  Chinese.  The  priest  of  the  locality, 
Pere  Pons,  took  the  side  of  his  co-religionist,  who 
won  the  case.  There  was  very  strong  feeling  ex- 
hibited in  the  locality,  because  it  was  given  out 
that  the  Chinese  authorities  are  afraid  to  give 
judgment  against  a  Chinese  Christian  if  the  priest 
of  the  district  takes  his  part.  Yu  Man  Tsu's  son 
got  a  few  hundred  men  together,  and  created  a  dis- 
turbance among  the  Chinese  Catholics.  The  au- 
thorities surprised  and  surrounded  him  at  a  place 
called  Tatsu,  sixty  miles  northwest  of  Chungking, 
and  cut  ofiE  his  head.  Yu  Man  Tsu,  being  at  the 
time  in  prison,  was  helpless ;  but  on  coming  out  he 

vowed  vengeance  against  every  Catholic  Chinese. 



When  I  left  Hankow,  Yu  Man  Tsu  had  a  priest 
called  Pere  Fleury  a  prisoner.  The  Viceroy  Kwei 
told  me  he  was  afraid  he  would  not  be  able  to 
quell  the  rebellion,  as  if  he  attempted  to  do  so  Yu 
Man  Tsu  would  cut  off  the  priest's  head. 

A  point  of  very  considerable  importance  to  be 
noted  with  regard  to  this  question  is,  that  the 
whole  of  the  property  mentioned  as  having  been 
destroyed  belongs  to  French  Catholic  Missions. 
The  province  where  this  piratical  devastation 
occurred  is  reported  to  be  the  richest  province 
situated  in  the  Yangtse  Valley.  After  recent  dec- 
larations with  regard  to  the  Yangtse  Valley,  there 
would  appear  to  be  a  large  field  for  political  com- 
plications in  the  event  of  the  French  wishing  to 
land  troops  to  protect  the  remnant  of  their  property. 

At  a  meeting  of  the  British  merchants  held  at 
Hankow,  strong  resolutions  {vide  Appendix)  were 
passed,  a  copy  of  which  I  was  asked  to  forward  to 
H.M.  Government  as  well  as  to  the  Associated 
Chambers  of  Commerce. 

The  merchants  declared  that  the  local  Govern- 
ment was  quite  unable  to  control  the  people.  This 
was  due  to  the  want  of  money  to  carry  on  adminis- 
tration, owing  to  seven  collectorates  for  likin  being 
allocated  to  pay  interest  on  the  Anglo -German 
Loan  of  March  8,  1898.  As  a  proof  that  the  mer- 
chants were  correct,  within  a  few  days  of  my  arrival 
at  Hankow,  late  in  November,  a  disastrous  fire 
occurred,  which  devastated  an  area  of  over  two 

miles,  burned  over  icxx)  people,  and  destroyed  prop- 



erty  to  the  estimated  value  of  ;^  1,300,000.  This 
fire  was  known  to  be  the  work  of  incendiaries,  as 
the  authorities  had  received  warning  that  the  town 
would  be  burned  in  order  to  create  a  disturbance, 
and  as  a  protest  against  the  people's  taxes  being 
paid  to  the  foreigner. 

Two  smaller  fires  occurred  while  I  was  there, 
also  the  work  of  incendiaries. 

The  British  merchants  declared  that  Anglo-Sax- 
on trade  and  commerce  was  seriously  hampered, 
as  the  Chinese  merchants  refused  to  do  any  busi- 
ness under  these  circumstances,  and  that  future 
development  of  trade  was  impossible.  The  whole 
question  resolved  itself  into  the  want  of  military 
and  police. 

The  British  merchants  here  also  called  atten- 
tion to  the  importance  of  opening  up  the  water- 
ways and  tributaries  of  the  Yangtse  River,  more 
particularly  with  regard  to  the  Tung  Ting  Lake, 
which  is  the  gate  of  the  rich  province  of  Hunan. 
To  carry  out  this,  it  was  suggested  that  a  British 
Consul  should  take  residence  at  Changsha,  the 
capital  of  Hunan,  a  great  trading  centre  on  the 
Siang  River. 

It  was  pointed  out  that,  though  the  opening  of 
the  port  of  Yohchau  will  be  most  beneficial  to 
trade,  it  is  not  the  great  distributing  centre  of  the 
province  of  Hunan,  whereas  Changsha  is. 

They  also  pointed  out  that  the  new  navigation 
laws  were  to  a  very  large  extent  nullified  in  utility 
by  foreigners  being  denied  the  right  of  residence 



in  the  country ;  and,  further,  by  steamboats,  under 
the  new  privilege,  only  being  allowed  to  carry 
cargo  within  the  area  of  the  port  of  registration. 

The  British  merchants  here  also  dwelt  upon  the 
very  unsatisfactory  position  in  which  British  sub- 
jects find  themselves  with  regard  to  the  rights  of 
property — z>.,  as  to  land  bought  outside  the  British 
concession  and  registered  at  the  British  Consulate 
under  Chinese  title-deeds.  The  complaints  made 
were  relative  to  the  position  taken  up  by  the 
French  and  Russian  authorities  in  Hankow,  who 
have  seized  upon  properties  which  not  only  the 
registers,  but  stones  delineating  the  boundaries, 
prove  to  belong  to  British  subjects.  There  is  no 
doubt  that  British  subjects  have  been  deliberately 
deprived  of  their  property  by  the  action  of  the 
French  and  Russian  Consuls. 

As  this  question  is  creating  the  keenest  interets 
in  all  Anglo-Saxon  communities  in  China,  it  may  be 
well  to  enter  rather  fully  into  it  in  this  Report.  The 
matter  is  well  known  to  the  Minister  at  Peking 
and  to  the  Foreign  Office.  I  will  report  on  the 
case  as  I  found  it.  The  British  Companies  prin- 
cipally affected  were  Messrs.  Greaves  &  Co.,  act- 
ing on  behalf  of  various  owners,  including  Sassoon 
and  others,  Messrs.  Evans,  Pugh  &  Co.,  and 
Messrs.  Jardine  &  Matheson. 

In  March,  1896,  the  boundaries  of  the  new 
French  and  Russian  concessions  were  settled  be- 
tween those  two  Governments  and  the  Chinese 

Government.     In  both  these  concessions  British 



subjects  owned  land.  Immediately  the  bounda- 
ries of  the  French  and  Russian  concessions  were 
so  settled,  all  British  owners  of  land  within  these 
concessions  protested  to  the  British  Government 
against  their  property  being  included.  The  For- 
eign  Office  answered  through  the  British  Minister 
in  China  that  "  owners  of  British  property  could 
not  be  included  within  these  concessions  without 
their  consent." 

The  French  Consul  repudiates  the  validity  of 
all  the  title-deeds  presented  by  Messrs.  Greaves 
and  Giddes  &  Co.,  on  behalf  of  their  clients,  which 
title-deeds  accompanied  their  protest  against  their 
property  being  included  in  the  French  settlement 

The  proofs  of  the  ownership  are : 

1.  Register  of  title-deeds  to  be  found  at 
British  Consulate. 

2.  Boundary-stones  engraved  with  owners' 
initials,  some  of  which  had  been  in  position 
for  thirty  years.     These  stones  I  saw  myself. 

3.  The  fact  that  the  land  has  been  owned 
for  thirty  years,  whereas  Chinese  law  gives  a 
title  conclusive  after  ten  years'  ownership  or 

In  addition  to  the  proof  of  British  ownership 
shown  by  registers  in  the  British  Consulate,  there 
were  boundary-stones  bearing  the  initials  and  Chi- 
nese name  of  either  the  owner  or  his  firm.  Some 
of  these  boundary-stones  have  been  removed  by 
the  order  of  the  French  Consul,  notwithstanding 

the  protest  lodged  by  the  British  Consul. 
K  14s 


And  yet  the  Russian  and  French  Consuls  have 
put  up  their  own  boundary-stones,  in  spite  of  the 
protest  of  the  British  Consul,  and  absolutely  de- 
cline to  consider  any  proposal  with  reference  to 
British-owned  property  over  which  their  conces- 
sions were  to  extend. 

January  i,  1898,  the  French  Consul  advertised 
a  sale  of  land  within  the  French  concession. 
Among  the  lots  advertised  was  land  owned  by 
Messrs.  Greaves  and  Giddes  and  other  British 

Messrs.  Greaves  immediately  protested  by  pub- 
lishing the  following  advertisement : 

"  Notice. 

"  The  whole  or  portions  of  Lots  5, 6,  and  7,  of  the  19  parcels 
of  land  on  the  plan  advertised  at  the  French  Consulate,  Han- 
kow, for  sale  on  the  7  th  April,  is  the  property  of  A.  D.  Sas- 
soon,  under  a  title-deed  registered  on  page  586  of  the  British 
Consular  Register,  measuring  520  feet  on  river  and  road,  with 
an  original  depth  of  400  feet,  more  or  less  (Chinese  measure), 
part  now  washed  into  the  river.  The  owner  has  not  author- 
ized the  sale. 

"  Greaves  &  Co. 
"  (Agents  for  Arthur  D.  Sassoon). 

"Hankow,  March  27,  1898." 

On  account  of  this  advertisement  Mn  Greaves 

was  refused  admittance  to  the  auction-room  where 

his  client's  property  was  being  sold  without  his 

consent     Further,  an   action  for  defamation   of 

character   was    instituted    against    him    by   the 

French  Consul,  but  afterwards  withdrawn. 



The  result  of  the  auction  was  that  the  French 
Consul  absolutely  sold  certain  lots  owned  by  Brit- 
ish subjects  without  their  consent. 

Under  such  circumstances  it  will  be  seen  that 
there  are  no  rights  of  property,  or  security  for 
British  ownership,  in  the  new  French  and  Rus- 
sian concessions. 

The  next  case  is  that  of  Messrs.  Evans,  Pugh 
&  Co.,  who  own  land  in  the  new  Russian  conces- 

The  land  was  originally  bought  by  this  firm  in 
1862,  and  registered  at  the  British  Consulate  in 
1864.  In  1887  the  hide  business  was  commenced 
on  this  property,  and  there  proceeded  uninter- 
ruptedly ever  since. 

April  4,  1896,  the  concessions  referred  to  were 
conceded  to  Russia  and  France. 

Messrs.  Evans  &  Pugh  immediately  entered  the 
strongest  protest  against  their  properties  being  in- 
cluded in  the  Russian  concession. 

July,  1896,  the  Foreign  Office  telegraphed  to 
Messrs.  Evans  &  Pugh,  through  the  British  Min- 
ister, "  British-owned  property  cannot  be  included 
in  Russian  concession  without  consent  of  owner." 
This  message  was  sent  twice — once  in  March  and 
once  in  July,  1896. 

Between  April,  1896,  and  December,  1898, 
Messrs.  Evans  &  Pugh  forwarded  nineteen  pro- 
tests, stating  they  would  not  consent  to  have  their 
property  included  in  the  Russian  concession.     In 

July,  1898,  Messrs.  Evans  &  Pugh  received  a  com- 



munication  from  the  Russian  Consul  warning  them 
that  their  hide  business  must  be  discontinued  on 
January  i,  1898,  or  it  would  be  prohibited. 

On  January  2, 1899,  Cossacks  forcibly  interfered 
to  prevent  hides  being  taken  into  Messrs.  Evans  & 
Pugh's  establishment,  and  also  seized  the  hides  al- 
ready  in  the  store  and  threw  them  out  On  Messrs. 
Evans  &  Pugh  appealing  to  the  British  Consul, 
and  asking  permission  to  enroll  special  constables 
for  the  protection  of  their  property,  the  British 
Consul  advised  them  to  do  nothing  of  the  sort,  as 
he  (the  British  Consul)  was  afraid  the  firm  would 
not  be  supported  in  such  action  by  H.M.'s  Gov- 

Messrs.  Evans  &  Pugh  are  perfectly  willing  to 
relinquish  their  hide  business  in  the  locality  owned 
by  them,  provided  they  are  reinstated  in  some 
other  suitable  locality  for  their  trade,  and  receive 
compensation  for  damage  to  their  trade,  as  well  as 
the  claims  they  will  have  to  pay  for  not  fulfilling 
certain  contracts,  owing  to  their  trade  being  tem- 
porarily suspended.  An  offer  has  been  made  to 
Messrs.  Evans  &  Pugh  of  a  locality,  but  they  were 
asked  to  pay  a  very  high  price  for  it,  and  no  com- 
pensation was  named  to  meet  the  loss  on  their  en- 
forced removal. 

The  views  of  H.B.M.'s  Consul  on  the  question 
are  expressed  in  the  following  manner.  He  re- 
marks that  both  firms  had  their  business  premises 
where  they  now  are  previous  to  the  granting  of 

the  Russian  concession  by  the  Chinese  authorities. 



It  seems  unfair,  therefore,  even  if  their  business 
should  prove  to  be  a  nuisance,  that  they  should 
suffer  the  severe  loss  which  they  will  inevitably 
incur  if  they  are  forced  to  leave  their  present  prem- 
ises. There  is,  he  continues,  absolutely  no  other 
suitable  site  which  they  can  obtain,  and  any  money 
compensation  will  be  comparatively  valueless  in 
view  of  the  certain  injury  which  will  be  done  to 
their  business,  even  if  it  is  not  completely  stopped. 

Another  case  of  a  similar  character  is  that  of 
Messrs.  Jardine,  Matheson  &  Co.,  who  bought 
eight  lots  of  land  between  October  i8,  1862,  and 
March  26,  1864.  The  registers  and  deeds  of  sale 
of  these  lots  are  in  the  British  Consulate  at  Hankow. 

This  case  is  something  similar  to  that  of  Messrs. 
Greaves  and  Giddes,  and  the  Russian  Consul  de- 
nies the  validity  of  the  deeds  registered  in  the 
British  Consulate  at  Hankow. 

At  present  the  whole  of  Messrs.  Jardine  & 
Matheson's  property,  comprising  the  eight  lots 
which  they  have  owned  for  over  thirty  years,  is 
included  in  the  Russian  concession,  notwithstand- 
ing many  protests  on  the  part  of  the  firm,  and  a 
distinct  intimation  from  the  British  Foreign  Office 
"that  no  British-owned  land  should  be  included 
in  the  Russian  concession  without  the  consent  of 
the  owner." 

In  the  interest  and  protection  of  British  prop- 
erty at  Hankow,  it  must  be  well  if  the  Associated 
Chambers  of  Commerce  were  to  ask  for  the  whole 

of  the  correspondence  on  these  cases. 



Hankow,  in  the  near  future,  is  certain  to  be  in 
a  position  of  great  wealth  and  trading  interest, 
therefore  land  in  and  about  the  city  is  daily  in- 
creasing in  value,  and  the  questions  mentioned 
here  seem  to  require  immediate  attention. 

Although  it  is  true  the  British  have  lately  been 
allowed  to  extend  the  area  of  their  concession  in 
Hankow  city,  it  must  not  be  forgotten  that  the 
Russian  and  French  concessions  have  not  been 
limited  to  the  city  itself,  but  that  they  have  further 
obtained  a  large  frontage  on  the  Wuchang  side  of 
the  river,  a  property  which  will  be  invaluable  by- 
and-by,  and  of  great  commercial  importance. 

The  towns  of  Hankow,  Hanyang,  and  Wuchang 
may  be  considered  as  the  gates  of  nine  provinces 
of  China.  Hankow  is  divided  from  Wuchang 
by  the  Yangtse  River,  and  Hankow  is  divided 
from  Hanyang  by  the  Han  River.  In  case  of  dis- 
turbances these  towns  could  easily  be  defended  by 
small  gunboats. 

Some  suggestion  has  been  made  that  the  British 
Government  should  force  the  Chinese  to  pay  a 
heavy  compensation  for  having  conceded  land  to 
the  Russians  and  French  containing  British-own- 
ed property.  This  is  a  cowardly  and  unchivalrous 
practice,  which  has  been  resorted  to  lately,  under 
similar  circumstances,  by  all  foreign  countries 
with  regard  to  China.  China  being  prostrate,  one 
European  power,  at  the  point  of  the  bayonet,  de- 
mands concessions  which  China  has  neither  the 

right  to  give  nor  the  power  to  refuse.     Immediate- 



ly,  another  European  power,  at  the  point  of  the 
bayonet,  compels  China  to  pay  heavy  compensa- 
tion for  acceding  to  demands  which  she  had  no 
means  to  resist.  No  more  effectual  means  could 
be  invented  to  undermine  the  authority  of  the 
Chinese  Government  and  disintegrate  the  Em- 

For  the  protection  of  existing  Anglo-Saxon  trade 
and  commerce  on  the  Yangtse  River,  and  to  give 
security  for  its  future  development,  it  is  absolutely 
necessary  that  shallow-draught  gunboats,  similar  to 
those  in  use  on  the  Nile,  should  be  sent  there  as 
soon  as  possible  to  patrol  the  upper  reaches  of  the 
river  above  the  rapids,  the  Poyang  and  Tung  Ting 
Lakes,  and  the  Siang  and  Han  Rivers,  the  latter  in 
direct  communication  with  the  rich  province  of 
Shensi.  There  would  be  no  difficulty  or  danger 
whatever,  as  is  generally  supposed,  in  steaming  up 
the  gorges  above  Ichang  to  Chunking,  provided 
the  steamer  had  speed  of  from  thirteen  to  fifteen 
knots.  This  could  be  done  at  any  time  of  year, 
although  the  Yangtse  River  rises  in  the  summer 
in  some  places  from  sixty  to  one  hundred  feet.  I 
spoke  to  the  Viceroys,  Liu  Kwen  Yi  and  Chung 
Chi  Tung,  on  this  matter,  and  they  both  told  me 
that  they  would  be  very  glad  to  see  such  gunboats, 
as  they  greatly  feared  disturbances ;  and,  owing  to 
scarcity  of  money,  they  had  been  obliged  to  dis- 
charge many  of  their  troops,  and  were  not  paying 
the  others  full  and  fair  wages.  It  might  be  pos- 
sible, in  order  to  encourage  friendliness,  and  help 



authority,  to  fly  the  British  and  Chinese  flags  on 
board  such  gunboats. 

Mr.  Archibald,  an  American  missionary,  said 
that  he  had  hoped  the  British  would  shortly  put 
gunboats  on  the  Yangtse  River  and  Tung  Ting 
Lake,  as  the  American  railway  from  Wuchang  to 
Canton  was  going  to  pass  right  through  Hunan, 
the  most  anti- foreign  province  in  China.  He 
thought  that,  unless  some  such  precautions  were 
taken,  serious  disturbances  would  arise. 

As  the  country  is  very  disturbed  in  the  province 
of  Szechuan,  no  delay  should  occur  in  sending  a 
gunboat  through  the  gorges ;  and,  as  the  water  is 
rising  in  April  and  May,  delay  is  unnecessary. 

The  following  number  of  steamers  on  the 
Yangtse  River  were  trading  between  Shanghai, 
Hankow,  and  Ichang  during  December,  1898. 

Between  Shanghai  and  Hankow : 

3  Jardine  &  Matheson. 

3  Butterfield  &  Swire. 

4  China  Merchants. 
4  Greaves  &  Co. 

2  Japanese. 
2  MacBean. 

Total....  IE 

Between  Ichang  and  Hankow : 

I  Jardine  &  Matheson. 

1  Butterfield  &  Swire. 

2  China  Merchants. 

Total ....     4 



No  steamer  at  present  plies  higher  than  Ichang. 

When  Szechuan,  Hunan,  and  the  other  prov- 
inces bordering  on  the  Yangtse  are  opened  for 
trade,  the  present  number  of  steamers  will  be 
greatly  multiplied. 

Two  steamers  are  being  built  in  Germany  to  be 
placed  on  the  Yangtse  River  shortly. 

Something  has  already  been  done  towards  the 
development  of  mineral  wealth  in  this  district 
by  his  Excellency  Chung  Chi  Tung,  Viceroy  of 
Hunan  and  Hupeh,  who  possesses  numerous  coal, 
iron,  and  other  mineral  fields  in  the  two  provinces. 
His  Excellency  began  by  working  a  coal-mine, 
and  an  iron-mine,  situated  at  a  long  distance  from 
each  other.  To  these  he  added  two  blast-furnaces, 
but  placed  them,  under  indifferent  management, 
so  far  from  both  the  coal  and  the  iron  that  an  enor- 
mous amount  of  capital  was  lost,  and  in  the  end 
it  was  found  better  to  hand  the  whole  thing  over 
to  a  company,  which  I  am  told  is  now  working 
with  some  success. 

I  visited  the  iron-mines,  which  furnish  the  blast- 
furnaces. They  are  seventy-six  miles  from  Han- 
kow. They  are  very  ably  managed  by  a  Grerman 
gentleman.  They  supply  three  kinds  of  ore — 
brown,  magnetic,  and  hematite.  Some  of  the  ore 
was  very  good,  yielding  from  70  to  75  per  cent,  of 
iron.  The  individual  mines  would  last  about  six 
years  more  at  the  present  rate  of  progress,  but  the 
whole  district  was  filled  with  similar  mines.  The 
mines  would  pay  extremely  well  if  the  Chinese 



managing  director  was  honest.    The  mines  are  at 
Wong  Chi  Tong. 

The  German  manager  could  deliver  ore  at  Han- 
yang at  one  tael  (50  cents)  per  ton,  including  care 
and  maintenance  and  every  possible  charge.  The 
Mandarin  who  administers  the  mine,  however, 
debits  the  same  coal  at  three  taels  a  ton,  and  it  is 
not  apparent  what  becomes  of  the  difference. 

The  whole  province  of  Hupeh  is  very  rich  in 
minerals,  but  this  is  the  only  instance  of  mineral 
riches  being  developed  in  that  locality. 

The  ore  is  put  on  trucks,  which  run  on  an  in- 
clined plane  worked  by  a  steel-wire  hawser  and 
an  engine.  At  the  bottom  of  the  plane  the  ore  is 
transferred  into  railway  wagons.  It  is  then  taken 
down  to  the  river  by  rail,  whence  it  is  water-borne, 
and  towed  up  a  distance  of  seventy-six  miles  to 
the  furnace  at  Hanyang.  All  the  railway  plant 
was  British. 

The  tea  business  at  Hankow  has  been  referred 
to  fully  in  the  Consular  Reports.  The  British 
interest  is  gradually  becoming  smaller.  The 
whole  business  may  be  said  to  be  Russian;  and, 
in  fact,  most  of  the  tea  bought  by  British  mer- 
chants is  for  Russian  account. 

Three  years  ago  the  Russians  started  charter- 
ing steamers,  other  than  British,  to  take  their  tea 
from  Hankow.  The  venture  proved  disastrous, 
and  they  returned  to  the  firm  of  Butterfield  & 
Swire  to  carry  their  trade. 

There  was  naturally  some  complaint  among  the 



British  merchants  at  the  decline  of  the  tea  trade 
with  Great  Britain ;  but  they  readily  admitted  that 
it  was  a  question  of  demand  and  supply,  and  that, 
owing  to  the  favor  shown  for  Ceylon  and  Assam 
tea  at  home,  the  Chinese  tea  had  been  supplanted. 
The  question  resolved  itself  into  one  of  taste. 

British  trading  interest  is,  however,  well  repre- 
sented in  the  Russian  tea  trade,  for  the  freight  is 
at  present  almost  entirely  in  British  hands,  and  the 
British  companies  make  many  thousands  each 
year  by  carrying  Chinese  tea  for  the  Russian  mer- 
chants  to  Russia. 

British  trading  interest  is  further  represented 
in  Hankow  by  the  fact  that  the  British  flag  covers 
cargoes  which  are  really  Chinese.  About  1500 
tons  of  shipping  a  week,  covered  by  the  British 
flag,  conveys  Chinese  trade. 

If  proper  security  were  given,  and  the  Chinese 
allowed  foreign  enterprises  for  developing  mineral 
industries,  it  is  impossible  to  calculate  what  the 
water-borne  traffic  of  the  Yangtse  would  become. 
Both  Chinese  and  missionaries,  well  acquainted 
with  the  fact,  constantly  informed  me  that  the  prov- 
inces of  Szechuan  and  Hunan  contain  large  areas 
of  very  great  mineral  wealth;  but  Hunan  enjoys 
no  foreign  enterprise  whatever,  and  Szechuan  has 
it  to  only  a  very  limited  extent. 

Elsewhere  I  make  a  proposal  of  how  I  think 
this  security  might  be  obtained  and  these  locali- 
ties developed. 

I  may  mention  here  that  I  received  the  greatest 



kindness  and  courtesy  from  the  Russian  merchants 
resident  in  Hankow,  who  took  me  over  their  works 
and  showed  me  the  manner  in  which  brick-tea  is 

Their  management  appeared  to  me  to  be  quite 
excellent.  Their  works  were  well  organized  and 
in  beautiful  order.  The  engineer  in  .charge  of 
their  works  was  a  Scotsman. 

While  at  Hankow  I  had  two  long  and  inter- 
esting interviews  with  his  Excellency  Chung  Chi 
Tung,  the  Viceroy  of  Hunan  and  Hupeh.  This 
Viceroy  is  celebrated  for  his  friendly  and  courteous 
bearing  to  all  foreigners,  and  also  for  his  enlight- 
ened views  as  to  the  necessity  of  opening  up 
China  by  means  of  developing  her  great  mineral 
resources  as  well  as  by  means  of  improving  the 
system  of  administration  throughout  the  Empire. 

His  Excellency,  although  holding  these  ideas,  is 
a  thoroughly  loyal  and  patriotic  Chinaman,  with  a 
great  affection  and  devotion  for  his  country. 

A  summary  of  the  interviews  will,  I  think,  be 
interesting  to  the  Associated  Chambers  of  Com- 

The  first  interview  lasted  four  hours.  I  was  re- 
ceived with  great  pomp,  ceremony,  and  hospitality. 
I  stated  clearly  to  the  Viceroy  the  anxiety  felt  by 
the  British  trading  communities  generally  as  to 
the  security  of  their  trade  and  commerce  in  China. 
I  also  pointed  out  that,  owing  to  want  of  security, 
Anglo-Saxon  investors  would  not  be  inclined  to 

find  fresh  capital  for  the  purpose  of  further  de- 



velopment  of  trade  in  China,  a  question  which 
concerns  Chinese  welfare  as  well  as  Anglo-S^on 
enterprise.  With  regard  to  the  first  question,  the 
Viceroy  was  perfectly  outspoken.  He  said  that 
he  was  afraid  of  disturbances  in  the  provinces  un- 
der his  control;  that  if  disturbances  became  serious 
he  had  not  enough  troops  to  quell  them,  owing  to 
his  finances  being  insufficient;  that  Likin  Collec- 
torates  in  his  provinces,  usually  allowed  for  pro- 
vincial administration,  had  been  allocated  to  pay 
interest  on  loans  contracted  by  the  Chinese  Gov- 
ernment with  foreign  nations.  He  questioned  the 
wisdom  of  this  act,  as  such  loans  were  for  the 
benefit  of  the  Chinese  Empire  as  a  whole.  The 
service  of  the  loans,  he  thought,  should  be  secured 
by  the  whole  Empire,  instead  of  falling  on  the 
Collectorates  situated  In  the  Yangtse  Valley. 

On  being  asked  why  he  feared  disturbances,  he 
said  the  people  had  got  it  into  their  heads  that 
they  were  taxed  in  order  to  pay  the  foreigners. 
This  had  kindled  the  latent  hostile  feeling,  always 
existing  among  the  Chinese  towards  foreigners. 

I  asked  his  Excellency  whether,  as  a  patriotic 
man,  he  was  not  nervous  as  to  the  future  of  his 
country.  He  replied  he  was  very  unhappy  about 
it ;  that  he  did  not  see  how  China  was  to  save  her 
integrity  unless  she  made  some  effort  herself.  I 
then  suggested  that  if  the  Chinese  Government 
were  to  request  the  British  Government  to  or- 
ganize the  Chinese  Army  as  a  whole,  the  British 

Government  might  possibly  agree  under  certain 



conditions.  His  Excellency  asked  what  conditions. 
I  replied,  conditions  embracing  matters  which  his 
Excellency  had  already  referred  to,  such  as  the 
opening  up  of  China's  mineral  resources,  reformed 
administration,  tariff  revision,  and  fiscal  reform, 
embracing  the  whole  Empire. 

Although  his  Excellency  was  entirely  in  sym- 
pathy with  the  proposal  that  the  British  should 
organize  the  Chinese  Army,  he  asked  whether  I 
thought  it  would  be  possible  to  employ  American 
and  Japanese  officers  as  well  as  British.  I  replied 
that  I  saw  no  difficulty  whatever,  but  thought  it 
an  excellent  proposition,  and  suggested  that  some 
German  officers  might  be  employed  as  well,  as  they 
had  already  drilled  some  ten  thousand  men  most 
admirably.  I  further  pointed  out  that  the  British 
people  had  no  desire  whatever  to  dominate  China, 
either  by  control  of  the  military  or  by  any  other 
method.  That  it  was  to  the  interest  of  the  great 
trading  nations  to  maintain  the  integrity  of  the 
Chinese  Empire,  so  that  the  policy  of  the  "  Open 
Door  "  and  equal  opportunity  for  trade  to  all  na- 
tions should  be  assured.  His  Excellency  asked 
me  to  draw  up  a  scheme  containing  proposals  both 
as  regards  organization  and  finance.  This  I  did, 
and  received  his  warmest  thanks. 

His  Excellency  was  quite  open  in  expressing 

his  anxiety  as  to  the  Russian  military  domination 

and  position  in  the  North.     He  said  that  even  if 

the  Chinese  asked  the  British  to  reorganize  the 

army,  and  the  British  agreed,  that,  in  the  event  of 



Russia  objecting,  which  she  certainly  would,  Great 
Britain  would  retire  from  the  agreement,  as  she 
was  afraid  of  Russia,  and  had  proved  this  by  her 
actions  in  the  North. 

The  Viceroy  informed  me  that  he  had  received 
letters  and  telegrams  from  the  Tsung-li  Yamen  at 
Peking  to  place  two  thousand  men  at  my  disposal, 
in  order  to  commence  the  nucleus  of  a  Chinese 
army  in  his  provinces  drilled  by  British  officers. 
*  I  informed  his  Excellency  of  my  interviews,  col- 
lectively and  individually,  with  the  members  of  the 
Tsung-Ii  Yamen  (which  will  be  found  under  chap- 
ter on  "Peking").  His  Excellency  said  he  saw 
two  insuperable  obstacles  to  the  proposal  of  the 
Tsung-li  Yamen.  They  were :  First,  and  most  im- 
portant, the  certainty  that,  if  the  plan  were  carried 
out  as  proposed  with  two  thousand  men  in  the 
province  under  his  administration,  it  would  im- 
mediately cause  other  countries  to  undertake  a 
similar  drilling  and  recruiting  of  Chinese  in  locali- 
ties which  other  countries  were  pleased  to  call 
their  Sphere  of  Influence.  Such  action  would 
tend  to  lead  to  the  dismemberment  of  China. 
Second,  that  the  Manchu  and  Chinese  troops 
could  not  possibly  be  placed  together  to  work 
under  one  lead,  and  that  he  had  no  power  to  give 
orders  to  the  Manchu  troops,  who  were  under  a 
separate  command  and  administration.  I  entirely 
agreed  with  his  Excellency  as  to  the  first  objec- 
tion, but  said  I  did  not  believe  the  British  Gov- 
ernment would  undertake  the  organization  of  sep- 



arate  provincial  armies,  but  that  they  possibly  might 
of  the  Imperial  Army  as  a  whole,  as  British  trade 
and  commerce  existed  in  all  parts  of  the  Empire, 
Anyhow,  I  should  have  no  authority  to  even  un- 
dertake the  drilling  of  two  thousand  men  without 
the  sanction  of  the  British  Government.  The 
question  could  not  be  entered  into  for  settlement 
between  his  Excellency  and  myself;  it  was  one  that 
would  have  to  be  settled  between  the  two  Gov- 

The  Viceroy  also  contended  that  there  would 
be  great  difficulties  about  finance.  As  I  was  con- 
versant with  the  different  Budgets  for  defence  for 
the  different  provinces  nearly  all  over  the  Empire, 
I  proved  to  him  that  China  could  have  a  very  effi- 
cient army  without  any  extra  taxation  if  the  money 
allowed  was  spent  as  intended.  A  large  proportion 
now  finds  its  way  into  the  pockets  of  the  officials, 
most  of  the  remainder  being  wasted  in  the  arsenals 
in  making  useless  and  obsolete  war  material. 

In  the  second  interview,  which  lasted  about  two 
hours,  the  Viceroy  appeared  very  anxious  to  know 
what  communications  I  had  had  originally  with 
the  Tsung-li  Yamen,  and  also  what  further  cor- 
respondence I  had  had  with  them  from  Hankow. 
He  was  more  strongly  in  favor  of  a  reorganization 
of  the  Chinese  Army  by  foreign  officers,  and  raised 
fewer  difficulties.  I  took  particular  care  to  impress 
upon  his  Excellency  that  my  suggestions  were 
solely  made  in  the  interests  of  protection  of  foreign 

trade  and  commerce  and  with  regard  to  their  future 



development,  and  that  it  had  nothing  whatever  to 
do  with  political  questions. 

His  Excellency  asked  me  to  inspect  the  arsenal 
under  his  control,  and  to  give  him  my  views  of  the 
work  turned  out.  An  account  of  this  arsenal  will 
be  found  in  the  chapter  on  "  Arsenals." 

I  received  while  at  Hankow  two  visits  from  the 
Taotai  Yu ;  he  was  in  charge  of  the  Chinese  Cus- 
toms. He  expressed  himself  as  being  very  friendly 
to  the  British,  and  hoped  that  the  policy  declared 
by  the  British  Cabinet  with  regard  to  keeping  the 
door  open  to  the  trade  of  all  nations  would  be  ad- 
hered to,  as  he  said  it  meant  a  declaration  in  favor 
of  maintaining  the  integrity  of  China.  He,  how- 
ever, declared  that  he  was  nervous  on  this  point  in 
the  future,  as  he  thought  that  China  and  the  Brit- 
ish Government  were  afraid  of  Russia. 

He  brought  me  letters  from  the  Viceroy  Chung 
Chi  Tung  concerning  my  proposed  army  scheme 
for  providing  security  for  trade  and  commerce. 

While  here  I  twice  visited  His  Excellency  Sheng, 
a  Director  of  Railways  of  the  Chinese  Empire,  a 
remarkably  shrewd,  clever,  and  enterprising  China- 
man. He  was  much  concerned  as  to  the  future 
of  the  Chinese  Empire,  declaring  he  thought  it 
would  shortly  fall  to  pieces.  He  said  he  had  on 
several  occasions  in  years  gone  by  written  memo- 
randa to  his  Government  begging  it  to  take  in  hand 
their  army  and  navy,  and  organize  them  under 
British  officers.  He  had  pointed  out  that  there 
would  be  no  danger  in  this,  as  the  British  were 

L  l6l 


traders,  and,  while  wanting  a  Chinese  army  to  pro- 
tect that  trade,  they  could  not  utilize  the  army  for 
political  purposes,  as  the  officers  would  be  Chinese 
servants,  like  Sir  Robert  Hart.  *  He  said  it  was  no 
use  taking  provincial  armies  in  hand  for  this  pur- 
pose,  as  that  might  invite  other  countries  to  do  the 
same  thing,  and,  if  done  at  all,  it  should  be  done  as 
a  whole. 

His  Excellency  was  very  interested  in  all  ques- 
tions connected  with  finance,  and  begged  me  to 
use  what  influence  I  could  with  the  Associated 
Chambers  of  Commerce  towards  getting  a  revision 
of  the  tariff.  I  said  that  I  was  certain  that  Britain 
would  entertain  no  such  question  unless  the  whole 
fiscal  system  of  the  country  was  taken  in  hand  at 
the  same  time.  Anglo-Saxon  trade  and  commerce 
is  severely  handicapped  by  the  present  unequal 
system  of  the  likin  and  loti-shui  taxes,  as  well  as 
the  uncertain  time  at  which  these  taxes  may  be 

His  Excellency  also  expressed  his  opinion  that 
England  did  not  take  the  initiative  in  China  be- 
cause she  was  afraid  of  Russia.  He  said :  "  Many  of 
our  people  are  saying,  *  What  is  the  use  of  think- 
ing about  the  English  to  help  us ;  they  never  do 
anything;  the  Russians  do  something;  they  are 
much  the  stronger  nation.  It  is  wiser  for  us  to 
make  friends  with  them.' "  I  asked  his  Excellency 
if  this  opinion  was  held  by  a  large  number  of  the 
influential  Chinese.     He  said :  "  There  are  some 

who  thought  it  might  save  their  country  if  China 



were  to  boldly  throw  in  her  lot  with  Russia,  as  by 
doing  so  it  would  certainly  be  a  protection  against 
the  predatory  action  of  other  Powers.  China 
would  certainly  break  up  if  the  millions  of  its  in- 
habitants perceived  its  Government  was  powerless 
to  prevent  any  European  Government  from  claim- 
ing and  annexing  any  part  of  the  Empire."  His 
Excellency  entreated  me  to  remain  longer  at  Han- 
kow, with  the  object  of  further  discussing  the  plan 
of  reorganizing  the  Chinese  Army  as  a  whole.  I 
declined  to  have  anything  to  do  with  this  matter,  as 
the  initial  step  promised  by  the  Tsung-li  Yamen  to 
me  on  October  22, 1898  {see  chapter  on  "  Peking  ") 
— viz.,  that  the  Chinese  Government  would  ask  the 
British  Government  to  undertake  the  reorgani- 
zation of  the  Chinese  Army  for  the  protection  of 
trading  interests— had  not  been  complied  with. 

His  Excellency  thought  it  might  be  for  the 
benefit  of  China  if  the  Viceroys  in  the  Yangtse 
provinces  brought  the  matter  before  their  Govern- 
ment. His  Excellency  asked  me  to  proceed  to 
Wong  Chi  Tong  to  see  his  iron -mines,  which 
formerly  belonged  to  Chung  Chi  Tung,  now 
worked  by  His  Excellency  Sheng  and  a  company. 

I  visited  Wong  Chi  Tong  as  invited,  an  ac- 
count of  which  will  be  found  on  p.  153. 

His  Excellency  Sheng  has  opened  a  coal-mine, 

Tingsham,  in  Hunan.     The  coal  is  very  good  for 

making  coke,  and  is  used  in  the  iron  and  steel 

works  at  Hanyang. 

His  Excellency  Sheng  also  invited  me  to  visit 



the  iron  and  steel  works  at  Hanyang;  the  man- 
agement was  under  two  Belgian  gentlemen ;  a 
British  mercantile  captain  was  in  charge  of  all 
transport  from  the  mines  to  the  furnaces.  The 
original  capital,  ;^750,cxx),  was  all  Chinese.  The 
works  have  been  in  active  progress  for  seven  years, 
originally  under  British  management.  There  are 
two  large  blast-furnaces,  both  British  made,  from 
Tees-side  Ironworks,  but  only  one  has  ever  been 
used.  The  present  output  is  75  tons  a  day.  There 
is  also  a  complete  Bessemer  plant,  which  can  turn 
out  80  tons  a  day.  The  whole  plant  was  employed 
when  I  was  there  in  making  rails  for  the  Shan- 
haikwan  Railway,  and  120  tons  of  rails  could  be 
turned  out  in  a  day.  The  works  employ  1000 
hands.  The  machinery  is  mostly  British.  The 
coal  used  from  Tongshan  comes  in  junks  from  the 
Hunan  Province,  200  miles  away.  It  is  very  good, 
but  is  only  worked  with  picks  and  shovels  on  the 
surface  and  by  the  Chinese.  The  whole  province 
of  Hunan  abounds  with  coal  of  very  good  quality, 
both  anthracite  and  bituminous. 

All  the  outcroppings  are  within  distance  of 
small  but  navigable  waterways. 

If  the  British  and  Belgian  gentlemen  were  al- 
lowed absolute  control  and  management,  these 
works  would  pay  very  high  dividends.  All  that  I 
saw  showed  want  of  management  and  waste  of 
money.  Sometimes  the  furnaces  are  stopped  for 
want  of  coal,  sometimes  for  want  of  ore.     Often 

there  is  a  glut  of  both. 



I  was  told  that  coal  costing  3CX5  cash  per  ton — 
e>.,  about  ^\d. — at  Hsainghua,  is  worth  9  dollars, 
or  18^.,  at  Hankow,  a  distance  of  about  400  miles. 

I  found  one  company  at  Hankow  doing  very 
profitable  business  in  antimony,  junk-borne  from 
Hunan,  and  two  Chinese  merchants  also  doing 
very  well  with  zinc  and  copper  ore,  brought  from 
the  same  district 

Lead  and  tin  are  also  constantly  brought  down 
from  Hunan  and  Hankow,  specimens  of  which  I 

If  foreigners  were  allowed  to  open  up  this 
province  of  Hunan  by  enterprise  and  capital,  and 
a  royalty  was  paid  to  the  Chinese  Government  on 
the  output  for  each  undertaking,  large  fortunes 
could  be  made  for  the  companies,  and  the  Chinese 
Government  would  derive  a  new  and  extremely 
profitable  source  of  revenue. 

At  present  the  province  of  Hunan,  though  very 
rich  and  the  people  very  well-to-do,  is  the  most 
anti-foreign  in  China.  Foreigners  who  penetrate 
into  Hunan,  even  with  the  help  of  the  Mandarins, 
by  means  of  a  military  escort,  do  so  at  the  risk  of 
their  lives.  This  I  was  told  by  missionaries  and  a 
gentleman  who  barely  escaped. 

In  the  year  1897  an  English  missionary  named 

Sparham  went  as  far  as  Hengchau.     There  has 

been  a  French  mission  in  this  place  for  over  one 

hundred  years,  and  Mr,  Sparham  saw  the  cross  on 

their  chapel,  but  he  was  not  allowed  to  land. 

A  British  Consul  has  just  been  sent  to  Yohchau, 



a  new  Treaty  port  at  the  mouth  of  the  Tung  Ting 
Lake — a  move  in  the  right  direction.  Before  any 
steps  can  be  taken  to  open  up  Hunan  proper,  a 
British  Consul  should  be  sent  to  Changsha,  the 
capital  and  most  important  town  of  the  province, 
on  the  Siang  River,  a  clear  blue- water  river,  about 
two  hundred  and  ninety-six  miles  from  Hankow, 
It  is  a  great  rice  -  distributing  centre,  rice  being 
much  cultivated  in  the  surrounding  districts.  Tea 
is  also  largely  exported  from  Hunan,  cowhides 
and  gall-nuts  and  very  good  silk. 

There  are  already  six  small  steam-launches  be- 
longing to  the  Chinese  plying  between  Hankow 
and  Hunan.  They  are  principally  used  for  pas- 
sengers, and  sometimes  for  towing  junks. 

Silver  and  gold  are  also  brought  down  in  small 

When  I  was  at  Hankow  reports  came  of  an  ex- 
tensive gold-field  in  this  province,  but  the  Chinese 
were  very  reticent  as  to  its  locality.  That  they 
are  determined  to  keep  foreigners  out  of  Hunan 
if  possible  is  proved  by  the  following  fact:  In 
June,  1898,  a  company  of  Hunanese  Chinese 
bought  from  an  American  firm  enough  plant  to 
erect  several  works  for  gold-milling.  It  cost  jC^Or 
000,  and  is  the  newest  and  most  intricate  machin- 
ery for  extracting  gold  (called  the  Huntingdon 
mills),  the  motive  power  being  centrifugal  force. 
The  firm  that  sent  it  out  wanted  to  send  men  to 
erect  it,  and  put  it  into  thoroughgoing  order,  but 

the  Chinese  would  not  hear  of  this.     In  Decem- 



ber  last,  the  firm  sent  out  an  American  gentleman 
(whom  I  met)  to  see  how  the  mill  was  going  on. 
The  Chinese  declared  it  was  working  very  satis- 
factorily, but  would  on  no  account  allow  him  to  go 
and  see  it. 

The  Hankow  and  Canton  Railway  is  to  pass 
through  Changsha,  the  capital  of  Hunan.  It  is 
certain  to  be  valuable ;  but  if  the  very  large  num- 
ber of  waterways  in  this  province  were  conserved, 
and  their  trade  protected  by  gunboats,  an  enor- 
mous trade  would  be  insured. 

There  were  two  very  profitable  albumen  manu- 
factories; they  were  started  with  foreign  capital 
and  in  foreign  hands,  but  not  British. 

There  is  also  a  large  match  factory,  doing  an 
excellent  business,  started  July,  1897,  with  a  cap- 
ital of  300,000  taels  —  about  ;^40,ooo  —  entirely 
Chinese  capital  and  management. 

There  is  also  a  very  large  trade  which  goes  by 
the  curious  cognomen  of  the  "muck-and-truck" 
tiade.  It  is  very  profitable,  and  consists  princi- 
pally of  hides,  bristles,  bones,  etc.  This  trade  is 
nearly  all  in  the  hands  of  the  Germans.  The 
British,  however,  are  now  beginning  to  see  the 
importance  of  this  industry. 

Another  trade  is  the  bamboo  trade,  from  the 
interior,  which  comes  via  the  Tung  Ting  Lake. 

There  is  also  a  trade  in  wool  and  feathers. 

There  is  a  large  trade  in  foreign  goods  with 

Hunan,  all  in  the  hands  of  the  Chinese.     It  is 

one  of  the  best  markets  in  China  for  Lancashire 



goods,  which  would  be  even  more  increased  if  the 
country  were  opened  up.  The  goods  are  all 
bought  at  Shanghai. 

Hunan  fully  illustrates  the  necessity  of  foreign- 
ers having  the  right  of  residence  if  they  wish  to 
increase  and  develop  their  trade. 

There  is  a  cotton-mill  at  Hankow  started  by  the 
Viceroy,  Chung  Chi  Tung.  It  was  said  to  be  a 
paying  concern,  but  there  is  a  great  deal  of  waste 
and  interference  on  the  part  of  the  managing 
Mandarin.  There  is  no  doubt  it  would  pay  ex- 
tremely well  if  put  under  the  sole  management 
of  the  able  Englishman  who  is  there. 

Owing  to  the  geographical  position  of  Han- 
kow, in  that  it  will  become  the  railhead  from  the 
north  and  south,  and  also  that  it  is  the  great  dis- 
tributing centre  for  the  whole  of  the  waterways 
in  the  heart  of  China,  it  is  certain  in  the  future 
to  become  the  wealthy  and  prosperous  place  that 
Chicago  has  for  similar  reasons  become  in 

At  the  Viceroy's  request  I  visited  the  Arsenal 
and  Military  School,  and  inspected  his  troops. 
For  remarks  on  these,  see  chapter  on  "  Forts  and 



The  estimated  population  is  636,351 


The  total  value  of  trade  in  1897  was  Hk.  Taels  13,556,- 
494  (;^i,9oo,ooo). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  641,795,  of  which  470,239  was  British. 

I  ARRIVED  at  Foochow  on  December  20,  1898. 
The  Committee  of  the  Chamber  of  Commerce 
handed  me  some  resolutions,  which  they  asked 
me  to  transmit  for  the  information  of  the  Asso- 
ciated Chambers  of  Commerce.    (See  Appendix.) 

The  city  of  Foochow  was  made  an  open  port 
by  Article  11.  of  the  Treaty  of  Nanking,  1842,  but 
up  to  the  present  time  only  a  very  small  portion 
of  the  island  Nantai  has  been  regarded  and  treated 
as  a  Treaty  Port. 

The  British  merchants  complained  very  warmly 
of  the  taxes  put  upon  their  trade  by  means  of  likin. 

The  city  of  Foochow  proper,  and  all  its  suburbs, 
are  not  considered  by  the  Chinese  authorities  as 
coming  under  Treaty  Rights. 

The  merchants  claim  that  all  imports,  after  hav- 
ing submitted  to  the  Custom-House  examination 



and  having  paid  their  duty,  should  be  allowed  free 
admission  to  Foochow  City  proper  and  its  suburbs. 

The  city  and  its  suburbs,  however,  are  treated 
as  if  they  were  in  the  interior,  and  a  heavy  likin 
tax  is  levied  on  goods  which  have  to  pass  between 
the  island  of  Nantai  and  the  city,  a  distance  of 
about  three  miles. 

This  likin  tax  being  imposed  is  most  detrimental 
to  the  progress  of  trade  and  commerce  in  this  port. 

Some  of  the  British  merchants  here  were  en- 
gaged in  the  tea-trade,  the  staple  trade  of  the  port, 
and  pointed  out  that  the  heavy  likin  tax  referred 
to  formed  an  insuperable  barrier  to  competition 
with  the  teas  of  India,  Ceylon,  or  Assam. 

The  present  system  of  taxation  is  rapidly  dimin- 
ishing the  tea-trade,  and  if  it  continues  will  prob- 
ably destroy  it  altogether. 

There  were  six  steam-launches  running  on^the 
River  Min  between  Foochow  and  Sueykow,  but 
none,  that  I  could  gather,  running  on  the  Yuenfoo 

There  is  no  doubt  that  Anglo-Saxon  capital 
could  be  profitably  invested  in  steamboats  for  ply- 
ing on  these  rivers  were  it  not  for  the  restrictions 
to  which  my  attention  was  called  here  as  at  other 
ports — viz.,  that  a  steamer,  under  the  new  inland 
navigation  laws,  can  only  carry  cargo  within  the 
area  of  the  port  of  registration. 

The  launches  that  were  running,  with  one  ex- 
ception, were  worked  with  Chinese  capital,  man- 
agement, and  crews. 



The  question  of  the  state  of  the  River  Min  was 
brought  to  my  notice.  I  observed  that  it  was 
silted  up  very  considerably,  and  I  was  informed 
that  the  silting  is  rapidly  becoming  worse.  This 
impedes  trade,  as  steamers  cannot  come  up  the 
river  to  load  or  discharge  at  the  settlement,  and 
even  steam  -  launches  are  often  delayed,  owing  to 
insufficiency  of  water,  which  prevents  them  run- 
ning between  the  settlement  and  the  Pagoda 
Anchorage.  The  Anchorage  is  nine  miles  from 
the  settlement,  and  the  settlement  about  thirty- 
four  miles  from  the  sea. 

From  what  I  saw  of  the  Min  River,  I  should  say 
that  if  its  conservation  is  not  taken  in  hand  very 
soon  between  the  Pagoda  Anchorage  and  the  settle- 
ment, water-borne  traffic  will  soon  be  suspended. 

The  people  have  been  allowed  to  run  out  fishing- 
stakes,  enclose  banks,  dump  down  rubbish  and 
ballast,  until  there  remains  only  a  narrow  winding 
channel,  which  at  spring-tides  gives  barely  eleven 

At  the  middle  ground  below  Pagoda  Anchorage 
and  above  the  Kimpai  pass,  the  river  has  shoaled 
two  feet  in  the  last  seven  years. 

Another  great  hinderance  to  business  brought  to 
my  notice  is  the  existence  of  a  board  of  Interna- 
tional Trade,  which  consists  of  the  Tartar  General 
Tsung  Chee  and  two  Taotais. 

All  international  business  is  intrusted  to  these 

gentlemen  by  the  high  authorities.    As  they  have 

no  regular  status,  the  local  officials  pay  little  or  no 



heed  to  their  "requests":  they  are  not  entitled  to 
give  orders. 

The  British  Government  has  never  formally  rec- 
ognized this  Board,  but  in  practice  the  Board  con- 
stantly intervene  between  the  British  Consular 
authority  and  the  Viceroy. 

It  can  easily  be  imagined  what  a  very  diflferent 
effect  an  order  under  the  Viceroy's  seal,  such  as 
given  at  Canton,  Wuchang,  or  Nanking,  etc.,  has 
on  a  prefect  or  magistrate,  compared  with  a  note 
from  two  Taotais  making  a  request.  This  method 
of  conducting  business  has  already  produced  fric- 
tion between  the  Consular  authority  and  the  Vice- 
roy, and  the  length  of  time  it  occupies  is  unques- 
tionably adverse  to  the  interests  of  trade. 

On  going  to  the  British  Consul  in  order  to  get 
proof  of  this,  and  representing  to  him  that  any- 
thing  he  could  tell  me  with  the  object  of  helping 
forward  the  development  of  Anglo-Saxon  trade 
and  commerce  would  certainly  be  interesting  to 
the  Associated  Chambers,  he  allowed  me  to  see 
the  following  letter,  which  was  written  to  the 
Nantai  likin  office : 

"  By  Article  11.  of  Nanking  Treaty.  Foochow 
is  one  of  the  cities  and  towns  open  to  trade  where 
only  the  just  dues  and  duties  promised  by  the 
Treaty  are  payable  on  foreign  trade.  Such  dues 
and  duties  are  simply  the  import  and  export  duties. 
Your  office,  however,  proposes  to  interpret  the  city 
of  Foochow  into  the  foreign  hongs  along  the  south 

bank  of  the  river  two  miles  from  the  city  gate. 



"  Moreover,  the  object  of  British  merchants  in 
importing  foreign  goods  is  to  sell  them  to  Chinese, 
and  the  framers  of  the  Treaties  understood  this, 
and  provided  a  tariff  accordingly.  Your  office, 
however,  proposes  to  make  the  import  duty  a 
charge'  which  merely  enables  goods  to  be  landed 
into  a  British  hong — a  contention  obviously  in- 
consistent with  the  wording  and  meaning  of  the 
Treaties," — July  12,  1898. 

The  Consul's  efforts  are  to  extend  the  area 
exempted  from  the  likin.  At  present  the  area 
only  consists  of  the  British  hongs  mentioned  in 
the  letter. 

While  at  Foochow  I  paid  a  visit  to  his  Excel- 
lency the  Viceroy  Hsu  Jung  Kwei.  He  received 
me  with  great  ceremony  and  honor. 

After  the  usual  formalities  common  in  China,  I 
informed  his  Excellency  that  I  was  entirely  un- 
official and  non-political,  and  that  my  mission  was 
to  report  on  the  prospects  of  British  trade  and 
commerce,  to  suggest  what  I  could  for  its  future 
development,  and  to  inform  the  Chambers  of 
Commerce  what  security  existed  for  its  develop- 
ment. His  Excellency  expressed  his  friendship 
and  good  feeling  towards  Great  Britain.  I  pointed 
out  to  his  Excellency  that  this  feeling  was  thor- 
oughly reciprocated  at  home,  that  the  earnest 
wish  of  the  British  people  was  that  friendly  rela- 
tions should  be  maintained,  and  that  such  rela- 
tions were  necessary  to  develop  and  extend  trade 
and  commerce,  the  great  interest  of  the  British 



people.  His  Excellency  said  that  the  good-will 
of  England  had  been  clearly  proved,  and  that  she 
was  the  only  Power  that  had  not  tried  to  annex  a 
portion  of  the  Chinese  Empire,  and  he  hoped  that 
she  would  endeavor  to  keep  the  Chinese  Empire 
in  its  integrity.  His  Excellency  further  said  that 
he  thought  China  should  have  an  army,  in  order 
that  she  might  defend  herself.  I  suggested  that 
if  China  were  to  ask  the  four  Powers  who  at  pres- 
ent hold  her  foreign  trade  to  help  her  to  reorgan- 
ize her  army,  I  thought  it  very  possible  the  four 
Powers  might  accede  to  that  request,  under  cer- 
tain conditions.  His  Excellency  asked  what  the 
conditions  were.  I  replied,  reform  of  administra- 
tion,  alteration  of  taxation,  and  free  permission  to 
open  up  the  great  latent  resources  of  the  Empire 
by  means  of  promoting  industries  with  foreign 
capital,  and  other  reforms  necessary,  in  order  that 

the  modern  requirements  inseparable  from  the 
development  of  trade  and  commerce  should  be 
complied  with. 

I  pointed  out  that  the  present  system  of  pro- 
vincial armies  was  inadequate,  extravagant,  and 
totally  ineffective,  and  referred  to  the  China-Japan 
War  as  an  illustration  of  the  disastrous  results  of 
having  such  disjointed  organizations  under  various 

His  Excellency  seemed  to  be  of  the  opinion 
that  the  provincial  system  was  best  for  China,  be- 
cause it  had  lasted  for  so  many  years.  When  I 
pointed  out  to  him  the  excellent  services  rendered 



to  the  Chinese  Empire  by  Sir  Robert  Hart,  in  his 
cosmopolitan  administration  of  the  Maritime  Cus- 
toms, which  was  not  provincial  but  Imperial,  his 
Excellency  seemed  to  modify  his  ideas,  saying  that 
was  very  true,  and  that  if  it  answered  in  one  de- 
partment it  was  quite  possible  that  it  might  an- 
swer in  another.  After  some  considerable  con- 
versation, his  Excellency  went  so  far  as  to  say  he 
would  memorialize  the  Central  Government  on 
the  matter.  His  Excellency  asked  me  if  I  would 
inspect  his  troops,  and  visit  the  dock -yard  and 
forts,  that  he  would  make  all  arrangements  to 
send  me  in  his  launch  down  the  river  to  the  forts, 
and  also  send  high  officials  to  conduct  me  over 
them.  He  asked  also  if  I  would  write  to  him  and 
tell  him  what  I  thought  would  make  them  more 
efficient.     This  I  did. 

His  Excellency  appeared  anxious  about  the 
future  of  his  country,  but  not  to  such  an  extent 
as  other  Viceroys  that  I  had  visited.  He  had 
only  been  one  month  in  office. 

After  visiting  the  arsenal  {see  "  Arsenals"),  I  called 
upon  the  Tartar  General  Tseng  Chee,  who  enter- 
tained me  most  hospitably.  His  Excellency  is  in 
sole  charge  and  in  command  of  this  arsenal,  and 
it  was  by  his  permission  that  I  was  enabled  to  go 
over  it.  I  spoke  to  him  about  the  condition  of 
the  arsenal  at  some  length,  pointing  out  the  waste 
of  money  going  on  in  that  establishment.  I  also 
told  him  that,  in  my  opinion,  it  was  no  use  for 
China  to  think  of  committing  the  extravagance  of 



having  a  fleet,  at  any  rate  at  present,  and  that  she 
ought  to  devote  her  attention  to  organizing  and 
making  an  efiicient  army  for  police  purposes 
throughout  the  Empire,  in  order  to  give  that 
security  which  would  invite  foreign  nations  to 
develop  their  trade  and  commerce  with  China. 
His  Excellency  asked  me  if  I  would  write  him  a 
detailed  description  of  what  I  thought  was  neces- 
sary in  numbers  to  make  an  efficient  army,  and 
also  if  I  could  make  some  calculation  as  to  its 
probable  cost.  This  I  did,  and  received  a  warm 
letter  of  thanks  in  return.  The  General  was  most 
intelligent  and  interested,  and  very  friendly  in  all 
he  said.  Later  on  I  went  with  the  General  to 
inspect  his  troops. 

It  came  to  my  knowledge  that  the  finances  in 
this  province  are  in  a  very  bad  way,  and  there  had 
been  considerable  difficulty  in  finding  funds  to 
pay  the  authorities  at  the  arsenal.  As  a  matter  of 
fact,  although  they  ought  to  have  been  paid  on 
December  i,  1898,  they  were  not  paid  until  De- 
cember 23,  1898. 



The  estimated  population  is  40,216 

The  total  value  of  trade  in  1897  was  Hk.  Taels  28^398,001 
(over  ;f  4,000,000). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  1,917,027,  of  which  1,655,864  was  British. 

Before  going  to  Hong  Kong  I  visited  Swatow. 
The  European  community,  including  missionaries, 
is  about  two  hundred. 

Swatow  was  first  opened  to  foreigners  by  the 
Treaty  of  Tientsin  in  1858. 

At  a  meeting  held  by  the  British  merchants  a 
resolution  was  confided  to  my  care  for  transmission 
to  the  Associated  Chambers  of  Commerce.  {See 

The  staple  trade  of  Swatow  is  sugar,  but  it  does 
not  appear  to  be  increasing  to  any  extent. 

There  was  a  good  tea  trade,  but  that  is  rapidly 

There  is  a  bean-cake  factory,  which  I  was  told 
was  paying  very  well. 

M  177 


The  people  all  round  Swatow  have  always  been 
of  a  very  independent  character,  and  the  author- 
ities have  never  been  able  to  impose  taxes  to 
the  same  extent  as  they  have  in  other  parts  of 

A  short  time  ago  an  attempt  was  made  by  the 
authorities  to  increase  the  likin  tax,  and  a  new  li- 
kin  house  was  erected.  The  people  immediately 
pulled  it  down. 

The  officials  in  this  locality  are  afraid  of  the 
people,  and  they  cannot  enforce  unjust  demands, 
as  they  have  no  troops  whatever.  The  result  is 
that  the  likin  tax  is  really  less  than  the  two-and-a- 
half  per  cent,  charged  for  transit  passes,  and,  ex- 
cept for  cotton-yarn,  I  could  not  gather  that  the 
transit  passes  are  used  at  all.  Whether  it  is  owing 
to  the  independent  character  of  the  people  about 
here  or  not  I  cannot  say,  but  there  are  very  few 
representatives  of  authority  in  the  country  adjoin- 
ing.  At  the  town  of  Chao-Chao  Fu,  about  thirty 
miles  distant  from  Swatow,  where  there  is  a  popu- 
lation of  over  one  million,  the  whole  constituted 
authority  is  represented  by  one  fourth-class  Man- 
darin and  four  Yamen  runners  or  police.  The 
people  there  are  now  perfectly  orderly,  and  far 
better  off  than  in  most  places  in  China.  The 
reason  appears  to  be  found  in  the  fact  that  be- 
tween 1870  and  1872  a  General  Fan  was  sent 
from  Peking  with  troops  to  quell  some  disturb- 
ances   between    the   clans    which    exist    in    this 

province,  who  had  been  fighting  for  some  time. 



He  decimated  the  whole  province,  and  they  are 
now  only  just  beginning  to  recover. 

I  found  many  reports  and  beliefs  current  as  to 
the  mineral  resources  of  this  province  (Kwang- 
tung),  but  no  foreigner  has  prospected  or  made  any 
report  on  the  subject  that  I  could  discover,  except- 
ing Captain  Fleming  of  the  Royal  Engineers. 

Some  eight  years  ago  a  Chinese  company  was 
formed,  and  the  money  subscribed  to  open  up 
some  mines,  but  a  story  got  about  to  the  effect 
that  all  the  women  would  be  barren  if  machinery 
was  introduced  and  the  country  opened  up.  The 
mining  projects  were  in  consequence  abandoned. 

In  contradistinction  to  Amoy,  the  natives  make 
their  own  salt  Although  salt  is  a  monopoly,  the 
authorities  are  unable  or  unwilling  to  enforce  the 
law  in  regard  to  it.  There  is  a  large  fishing  in- 
dustry  at  Swatow,  and  as  they  make  the  salt  them- 
selves it  is  very  profitable. 

Most  of  the  British  merchants  here  appeared 
very  satisfied  with  things  as  they  are.  Their  busi- 
ness is  principally  shipping  industry.  There  were 
some  steamboats  running  up  the  river  to  Chao- 
Chao  Fu  and  San-Ho-Pa. 

Only  one  steamer  has  been  added  since  the 
new  navigation  laws  came  into  force,  owing  to 
the  restrictions  so  frequently  referred  to  in  this 

There  is  a  very  large  trade  between  Swatow  and 
Newchwang,  90  per  cent,  of  which  is  carried  in 

British  bottoms. 



British  piece-goods  hold  their  own  with  Ameri- 
can piece-goods  here  better  than  they  do  in  the 
North ;  but  all  American  goods  are  brought  in 
British  bottoms,  and  are  British-owned  at  time  of 

It  was  pointed  out  to  me  by  the  British  mer- 
chants that  a  railway  would  be  certain  to  pay  if 
constructed  from  Swatow  to  the  native  city  of 
Chao-Chao  Fu,  about  thirty -five  miles  distant. 
The  line  would  be  easy  to  make,  as  it  would  run 
over  very  flat  plains  and  not  cause  an  expensive 
outlay.  There  is  a  very  heavy  trade  between  the 
two  places,  and  at  present  the  whole  traffic  is 
carried  by  water  on  a  river  that  is  always  shal- 
low, and  in  the  dry  season  (the  winter)  falls  to 
ten  inches.  All  trade  has  to  be  carried  on  in 

I  asked  them  why,  if  the  proposal  was  so 
clearly  a  good  one,  they  did  not  subscribe  the 
capital  and  ask  for  a  concession.  I  was  informed 
by  Mr.  Monroe,  who  is  the  head  of  Bradley  &  Co., 
that  Messrs.  Jardine  &  Matheson  had  already  sur- 
veyed the  country  as  far  back  as  1888,  and  found 
out  the  practicability  of  the  scheme.  A  year  ago 
Messrs.  Bradley  &  Co.  applied  to  the  Chinese  au- 
thorities at  Canton  for  permission  for  themselves 
and  some  Chinese  friends  with  Chinese  capital  to 
construct  the  railway.  They  got  no  direct  reply, 
but  were  given  to  understand  that  there  is  deter- 
mined opposition  to  the  scheme. 

Another  similar  case,  showing  the  restrictions 



fatal  to  the  development  of  trade,  was  brought  to 
my  notice.  The  same  firm,  Messrs.  Bradley  & 
Co.,  in  1892,  were  instrumental  in  floating  a 
scheme  to  provide  the  town  of  Swatow  with  fresh 
water,  of  which  it  has  none  at  present,  save  what 
is  drawn  from  the  river,  which  is  brackish  and 
muddy.  The  money  required  was  all  subscribed 
by  local  Chinese,  the  sun^eys  were  made,  the  land 
bought,  and  everything  ready,  when  the  scheme 
was  wrecked  owing  to  the  opposition  of  the  people 
in  the  neighborhood.  The  reason  for  the  oppo- 
sition was  never  discovered.  The  Taotai,  at  that 
time,  was  actually  in  favor  of  the  scheme,  but  he 
gave  way,  declaring  openly  that  he  feared  the 

As  matters  are  at  present,  there  does  not  seem 
much  chance  for  any  substantial  development  of 
trade  in  this  locality.  , 



The  estimated  population  is  96,370 


The  total  value  of  trade  in  1897  was  Hk.  Taels  12,973,616 
(over  ;f  1,800,000). 

The  total  tonnage  of  shipping  in  1897  was  1,727,251,  of 
which  1,417,135  was  British. 

On  my  way  from  Shanghai  to  Hong  Kong  I 
visited  Amoy,  a  port  situated  upon  the  island  of 
Haimun,  at  the  mouth  of  the  Pei  Chi  River. 

This  port  was  first  opened  to  foreign  trade  by 
the  treaty  of  Tientsin  in  1858. 

I  met  the  Amoy  Chamber  of  Commerce  and 
received  from  them  some  resolutions  for  delivery 
to  the  Associated  Chambers  of  Commerce.  ( Vide 

I  found  that,  about  twenty  years  ago,  tea  was 
the  great  trading  interest  of  Amoy,  but  it  has  de- 
clined so  considerably  that  it  is  a  mere  question 
of  time  before  it  is  completely  extinct  The  rea- 
sons given  me  were,  the  competition  of  the  Assam 
and  Ceylon  teas. 

When  I  was  there,  there  was  a  certain  amount 



of  tea  in  the  hands  of  tea  merchants  which  they 
told  me  they  did  not  think  they  had  a  chance  of 
selling.  I  asked  if  anything  could  be  suggested 
to  improve  the  rapid  decline  of  this  export,  and  I 
was  given  a  copy  of  some  suggestions  made  by  the 
Amoy  General  Chamber  of  Commerce  to  the 
Commissioner  of  Customs  in  1896,  of  which  the 
following  is  a  copy : 

Amoy  General  Chamber  of  Commerce. 

Extract  from  a  communication  to  the  Commis- 
sioner of  Customs,  Amoy,  dated  i8th  February, 
1896,  in  reply  to  his  request  for  the  Chamber's 
views : 

"  The  decline  in  the  export  of  Amoy  Oolong  is 
owing  to  the  competition  of  Formosa  Oolong,  and 
also  to  the  steady  deterioration  of  its  quality  year 
by  year.  It  is  quite  possible  that  the  quality 
might  be  improved,  and  that  Amoy  Oolong  might 
again  recover  a  good  portion  of  its  lost  position ; 
but  this  Chamber  is  of  opinion  that  such  improve- 
ment can  never  be  done  by  the  Chinese  alone,  and 
I  am  therefore  unable  to  offer  any  suggestions 
that  would  be  of  assistance  to  you  in  framing  in- 
structions for  the  guidance  of  teamen  in  the  interior. 

"  I  can,  however,  with  the  fullest  confidence, 
recommend  your  urging  upon  the  Imperial  Chinese 
Government  the  adoption  of  the  following  five  sug- 
gestions : 

"  I.  The  obtaining  of  qualified  gardeners 

from  India  or  Ceylon  to  superintend  the  re- 



organization  of  the  Tea  Gardens,  and  to  in- 
struct the  native  Chinese  in  the  most  improved 
methods  of  cultivation. 

"  2.  Improved  methods  of  preparation  by 
machinery,  etc.,  inland,  with  the  right  of  for- 
eign supervision. 

"  3.  Collection  of  likin  to  be  made  at  the 
port  of  export. 

"4.  Combined  export  duty  and  likin  not 
to  exceed  the  Japan  tariff. 

"  5.  Articles  used  in  the  manufacture  and 
packing  of  tea  to  be  taxed  as  lightly  as  possi- 
ble, and  a  drawback  to  be  allowed  in  lead  used 
as  packing  material." 

However,  from  the  remarks  made  to  me,  I  do 
not  think  there  seems  much  chance  of  the  tea  trade 
being  reinstated  in  the  near  future.  Formosa  tea 
comes  through  Amoy,  and  this  trade  has  not  been 
appreciably  hurt  by  competition  with  Ceylon. 
Nearly  all  the  Formosa  tea  goes  to  America.  I 
could  not  find  that  there  was  any  tea  exported  for 
the  Russian  trade  from  Amoy. 

It  will  be  observed  that  this  is  one  of  the  first 
places  I  visited  where  statistics  show  that  trade 
has  declined.  I  endeavored  to  find  a  reason  for 
this,  and  elicited  the  following  facts:  The  mer- 
chants were  loud  in  their  complaint  relative  to 
the  imposition  of  the  likin  tax  around  Amoy.  It 
was  so  heavy  that  no  European  goods  got  far- 
ther into  the  country  than  twenty  miles.     After 



that  distance  local  taxation  made  them  too  ex- 

I  was  informed  also  that  local  taxation  either 
prevents  industries  being  started,  or  kills  them 
when  they  are  started. 

On  asking  for  an  instance,  Mr.  Cass,  one  of  the 
leading  merchants  of  the  place,  told  me  that  he 
had  started  some  flour-mills  for  the  Chinese,  but 
that  the  local  taxation  soon  killed  them. 

Europeans  are  not  allowed  themselves  to  put  up 
mills  owing  to  the  law  forbidding  right  of  resi- 
dence. If  the  foreigner,  as  on  this  occasion,  put 
up  mills  for  the  Chinese,  the  Chinese  are  so  heav- 
ily taxed  that  they  cannot  continue  the  business. 
In  the  case  I  have  mentioned,  Mr.  Cass  was  a  loser 
as  well  as  the  Chinese.  The  example  shows  how 
British  trading  interests  are  affected  adversely  un- 
der the  present  system. 

Another  case  in  connection  with  Mr.  Cass  came 
to  my  notice.  There  is  most  excellent  clay  for 
brick -making  near  Amoy.  Mr.  Cass  and  some 
Chinese  wished  to  put  up  some  brick-making  ma- 
chinery, but  the  Chinese  officials,  on  being  applied 
to,  said  they  would  protect  the  old-fashioned  plan 
of  hand-made  bricks.  If  they  had  been  permitted 
to  put  up  the  machinery,  Amoy  could  have  devel- 
oped an  enormous  trade  in  bricks. 

Another  trade  that  has  been  killed  at  Amoy  is 
the  salt  fish  trade.  Although  the  Chinese  could 
themselves  make  any  amount  of  salt,  the  salt  mo- 
nopoly is  rigidly  enforced  by  the  authorities ;  the 



consequence  is  they  have  to  import  salt  fish  from 
Singapore  at  a  much  larger  price  than  they  could 
preserve  it  locally.  It  will  be  seen  in  the  chap- 
ter on  "Swatow,"  that  in  that  place  they  salt 
their  own  fish  and  so  possess  a  thriving  industry, 
officialdom  not  being  so  powerful  in  that  locality. 
The  importation  of  salt  is  prohibited  by  treaty,  and 
is  a  Government  monopoly.  The  result  is  that 
the  cost  of  home-made  salt  has  become  so  great, 
owing  to  extortions,  exactions,  and  squeezes,  that 
it  is  a  fact  that  if  salt  could  be  imported,  and  50 
per  cent,  duty  put  upon  it,  it  would  still  sell  under 
the  price  paid  for  home-made  salt,  and  even  then 
give  the  Government  a  good  and  sure  source  of 

I  would  remark  that  the  salt  monopoly,  in  in- 
creasing the  price  of  food,  is  a  tax  on  the  poor 
and  not  on  the  rich,  and  there  can  be  no  doubt 
that  it  has  an  effect  on  the  stamina  of  the  Chinese. 
From  what  I  could  gather,  the  insufficiency  of  salt 
in  their  food  is  undoubtedly  the  cause  of  the  prev- 
alence of  much  preventable  disease. 

While  the  importation  of  salt  is  prohibited,  salt 
fish  is  allowed  to  be  imported  under  the  treaty 
tariff  of  5  per  cent,  ad  valorem.  Almost  all  the 
salt  fish  eaten  in  the  province  where  Amoy  is 
situated  is  imported  from  abroad.  The  coast 
teems  with  fish,  and  if  the  salt  monopoly  were 
removed  a  new  trade  would  spring  up. 

With  regard  to  the  constant  famines  which  take 

place  in  China,  I  found  here  what  may  perhaps  be 



considered  an  ample  reason  for  the  recurrence  of 
these  disasters. 

Grain  is  allowed  to  be  imported  freely  from 
abroad,  but  it  is  not  allowed  to  be  moved  from  one 
district  to  another  without  special  permit  from  the 
Chinese  Government 

Mr.  Gardner,  who  was  British  Consul  at  Amoy 
when  I  was  there,  and  who  before  that  had  been 
consul  on  the  Upper  Yangtse,  gave  me  some  in- 
teresting details  proving  the  prodigality  of  the 
present  system.  He  remembered  rice  being  two 
dollars  a  picul  at  Changchou  and  Chuan  Chou, 
places  about  thirty  miles  from  Amoy,  when  rice 
was  three  dollars  a  picul  at  Amoy,  but  authority 
would  not  allow  rice  to  be  sent  from  one  place  to 
the  other. 

The  growers  of  rice  in  the  district,  only  having 
their  own  neighborhood  as  a  market,  naturally 
grow  the  exact  quantity  they  think  will  be  re- 
quired, and  scarcity  of  rice  in  the  district  is  a  gain 
to  the  grower  because  it  sends  up  the  price. 

If  a  crop  fails  over  an  extensive  portion  of  the 
country,  there  being  no  surplus  of  other  districts 
to  supply  the  deficiency,  a  famine  is  the  result. 

Mr.  Gardner  told  me  that  the  Upper  Yangtse, 

after  the  summer  floods,  like  the  Nile,  deposits  a 

rich  alluvial  soil,  on  which  heavy  crops  of  wheat 

can  be  grown  without  manure  or  tillage.     The 

seed  is  simply  thrown  on  the  receding  water.   Yet, 

owing  to  the  prohibition  to  export  grain,  this  does 

not  add  to  the  wealth  of  the  Yangtse  Valley. 



Mr.  Gardner  told  me  he  had  himself  seen  whole 
fields  of  ripe,  golden  corn  wasted,  either  by  driving 
cattle  into  the  fields  or  by  cutting  down  the  eared 
blades  and  using  them  as  fuel. 

Such  maladministration,  which  inevitably  pro- 
duces poverty  among  a  very  large  section  of  the 
people,  is  one  of  the  many  causes  which  hinder 
the  development  of  our  trade  with  China.  The 
Chinese  can  only  buy  our  goods  if  they  have 
money  to  pay  for  them,  and  alteration  and  admin- 
istration even  in  this  one  particular  would  produce 
a  permanent  relief  to  the  people  of  whole  districts, 
increase  their  happiness  and  contentment,  and 
provide  them  with  money  to  enable  them  to  buy 
many  of  those  foreign  goods  which,  under  altered 
circumstances,  would  become  necessaries  of  their 

The  merchants  informed  me  that  wheat  could 
be  grown  in  great  quantities  in  this  province ;  but 
I  have  already  pointed  out  that  restrictions  would 
not  make  it  worth  the  while  of  any  grower  to 
embark  in  such  an  enterprise. 

The  province  of  Kwangtung  is  rich  in  coal  and 
iron.  Captain  Fleming,  of  the  Royal  Engineers, 
as  far  back  as  the  year  1882,  prospected  and  re- 
ported finding  a  coal  and  iron  district  within  forty 
miles  of  Amoy.  The  area  of  the  district  was  over 
fifty  miles.  Owing  to  the  passive  resistance  of  the 
authorities,  no  one  has  been  able  yet  to  make  a 
start  and  develop  these  latent  resources. 

If  the  right  of  residence  was  conceded,  there 



could  be  no  doubt  that  large,  profitable,  and  grow- 
ing industries  would  soon  be  the  result.  The 
name  of  the  district  where  the  minerals  are  to  be 
found  is  Ankoi. 

A  small  rail  or  tram  would  be  necessary  for  only 
a  distance  of  twenty  miles  to  a  place  whence  the 
minerals  could  be  water-borne. 

I  was  told  that  the  Japanese  are  trying  to  get 
hold  of  these  mines,  if  they  can  manage  to  get  the 
necessary  concession. 

All  the  points  brought  to  my  notice  at  Amoy 
with  regard  to  the  difficulties  of  developing  trade 
were  entirely  due  to  the  obstinate  conservatism  of 
the  officials. 

The  likin  tax  was  perhaps  more  irksome  at  this 
place  than  any  other  that  I  visited.  The  limit  of 
the  transit  passes  is  really  the  limit  of  traffic,  and 
that  limit  is  a  very  confined  area.  The  merchants 
told  me  they  never  knew  where  they  were  with  re- 
gard to  likin  taxes ;  the  dates  for  payment  and  the 
amount  to  be  paid  were  continually  being  altered. 
In  this  province  the  likin  tax  has  the  extra  disad- 
vantage of  existing  under  many  other  names. 

I  found  that  under  the  new  navigation  laws  (in- 
land waterways),  twelve  new  steamers  had  been 
started,  six  of  which  were  under  the  British  flag. 

About  100,000  Chinese  emigrate  annually  from 

Amoy  to  Singapore,  of  whom  about  50  per  cent. 

remain.     Whether  or  not  it  is  on  account  of  the 

treatment  the  Chinese  receive  at  Singapore,  I  do 

not  know ;  but  the  feeling  towards  the  British  at 



Amoy  is  of  the  most  friendly  character.  On  the 
occasion  of  the  Jubilee  of  Her  Majesty  Queen  Vic- 
toria, the  city  of  Amoy  was  gratuitously  decorated 
by  the  Chinese  community. 

As  an  example  of  the  confidence  in  the  British 
displayed  by  the  Chinese,  before  the  Japanese  oc- 
cupied Formosa  some  of  these  Chinese  invited  Mr. 
Bruce  and  Mr.  Cass,  two  British  merchants  of 
Amoy,  to  go  to  Formosa  to  give  advice  to  the 
people.  Upon  their  recommendation  the  Chinese 
gave  up  their  arms. 



The  estimated  population  is  246,880 


The  total  value  of  trade  in  1897  was  ;£'5o,ooo,ooo. 
The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  15,565,843,  of  which  8,268,770  was  British. 

On  my  arrival  at  Hong  Kong  on  September 
30th  I  found  there  the  leading  Reformer,  Kang 
Yu  Wei,  who  had  just  arrived  in  a  P.  &  O.  vessel, 
escorted  by  a  British  man-of-war. 

Hoping  to  be  able  to  get  the  views  of  the  Re- 
form Party  on  the  possibilities  of  the  opening  up 
of  China  and  the  consequent  development  of  trade 
and  commerce,  I  asked  Kang  Yu  Wei  to  come 
and  see  me.  He  came  under  police  protection, 
|(io,cxx)  having  been  offered  for  his  head.  In  an 
interview  which  lasted  some  considerable  time, 
Kang  Yu  Wei  intimated  to  me  that  the  great  ob- 
ject of  the  Reform  Party  was  to  introduce  West- 
em  ideas,  that  if  China  did  not  herself  introduce 
reforms  suitable  to  modern  requirements,  it  was 
inevitable  that  she  would  crumble  to  pieces,  and 

her  Empire  be  divided  among  the  nations  of  the 



earth,  that  the  strongest  sentiment  in  the  minds 
of  the  Reform  Party  was  patriotism,  that  their  ob- 
ject was  to  keep  China  an  Empire  and  to  support 
the  dynasty,  but  that  neither  was  possible  unless 
China  saw  the  necessity  of  adapting  herself  to 
Western  ideas.  He  said  his  Majesty  the  Em- 
peror was  entirely  in  accord  with  those  sentiments. 
He  said  that  the  Reformers  had  entreated  the 
Emperor  to  get  the  assistance  of  Great  Britain  to 
enable  his  Majesty  to  carry  out  these  alterations 
in  the  system  of  their  administration,  without 
which  China's  condition  would  be  hopeless  and 

On  asking  him  why  he  mentioned  Great  Britain 
more  than  other  countries,  he  replied  that  China 
had  known  Great  Britain  longer  than  any  of  the 
other  Great  Powers,  that  her  trade  with  China  was 
larger  than  any  of  the  other  Powers,  and  therefore 
it  was  to  the  interests  of  Great  Britain  herself  to 
help  China,  and  that  the  British  were  honest 
traders,  and  that  the  Chinese  could  trust  them. 
Also  that  in  the  wars  that  had  occurred  between 
Great  Britain  and  China  in  the  past.  Great  Britain 
had  always  behaved  in  an  honorable  and  chival- 
rous manner  both  during  war-time  and  in  the  mo- 
ment of  victory. 

I  asked  Kang  Yu  Wei  what  position  the  Re- 
form Party  was  in  at  that  moment.  He  replied, 
"  Completely  crushed,  but  not  killed,"  and  that  it 
was  certain  to  assert  itself  again  in  the  near  future. 

The  danger  was  that  China  might  break  up  be- 



fore  the  patriotic  Reformers  had  time  to  bring 
about  those  changes,  which  were  necessary  if 
China  was  to  continue  an  Empire, 

I  asked  him  who  were  the  Reformers  who  had 
been  publicly  executed  on  September  28th.  He 
said  that  there  were  six,  one  of  whom  was  his  own 
brother.  All  six  were  gentlemen  of  good  birth 
and  education,  and  highly  cultured.  Kang  Yu 
Wei  himself  is  one  of  the  best  known  scholars  in 
China.  He  said  that  reforms  in  the  East  invari- 
ably required  martyrs,  and  that  if  China  was  not 
broken  up  posterity  would  honor  the  heroic  pa- 
triotism of  those  six  men,  who  had  sacrificed  their 
lives  in  the  cause  of  Reform. 

I  asked  Kang  Yu  Wei  whether,  if  the  Reform 
Party  had  come  into  power,  they  would  have 
opened  up  China  to  the  trade  and  commerce  of 
the  world.  He  said  certainly,  as  that  would  have 
made  China  richer,  and  strong  enough  to  keep 
herself  an  Empire. 

He  gave  me  a  long  list  of  patriotic  men  who 

would  look   upon  Reform   with   favor.     I  asked 

him  if  he  could  give  me  a  reason  why  so  many 

prominent  men  were  in  favor  of  Reform,  as  the 

general  opinion  in  Great  Britain  was  that  those 

who  wished  for  Reform  in  China  were  very  few  and 

far  between.     He  replied  that  those  who  were 

educated,  and  who  really  understood  the  question, 

were  quite  assured  that  without  Reform  the  Chi- 

nese  Empire,  which  had  lasted  4000  years,  must 

most  certainly  crumble  to  pieces. 
N  193 


I  reminded  Kang  Yu  Wei  that  there  were 
430,000,000  of  people  in  China,  and  asked  him  if 
he  could  give  me  an  opiaion  as  to  whether  there 
were  a  large  number  in  the  country  in  favor  of 
Reform.  He  answered  that  he  did  not  think  so 
at  present,  as  the  people  did  not  understand,  but 
many  educated  and  patriotic  men  who  were  in 
favor  of  Reform  had  been  showing  the  people 
that  if  the  changes  they  advocated  were  brought 
about,  the  country  would  be  very  much  richer,  and 
taxation  made  equitable.  I  asked  if  he  thought 
disturbances  were  likely  to  occur;  he  said  he  did 
not  think  so  for  the  moment,  as  the  execution  and 
degradation  of  leaders  of  Reform  had  for  the  pres- 
ent checked  its  progress;  but  that  the  doctrines 
laid  down  as  necessary  for  the  preservation  of 
China  were  certain  to  be  supported  with  increased 
energy  before  very  long. 

There  were  many  other  topics  on  which  Kang 
Yu  Wei  touched,  but  as  they  were  purely  political, 
and  had  nothing  to  do  with  commercial  matters, 
they  have  no  place  in  this  Report. 

I  was  exceedingly  impressed  by  the  evident 
loyalty  and  patriotism  of  Kang  Yu  Wei,  and  his 
unselfish  devotion  to  his  country.  There  could  be 
no  doubt  of  his  earnestness.  It  was  with  very 
great  regret  that  I  came  to  the  conclusion  that 
the  Reformers  had  been  very  unmethodical,  and 
used  too  much  haste  in  their  efforts  to  serve  their 
country,  and  had  thus  defeated  their  own  ends. 

They  had  been  pushing  reforms  before  preparing 



the  way.  Theoretically,  all  that  they  urged  was 
quite  sound,  and  manifestly  for  the  good  of  their 
country;  practically,  they  had  made  no  arrange- 
ment or  organization  for  carrying  their  theories 
into  effect.  I  pointed  out  to  Kang  Yu  Wei  that 
the  usages,  characteristics,  laws,  and  systems  which 
had  ruled  in  an  Empire  for  thousands  of  years 
could  not  be  revolutionized  in  a  few  months  by  an 
occasional  edict  from  Peking.  Kang  Yu  Wei  ac- 
knowledged the  truth  of  this. 

I  lost  no  opportunity  of  ascertaining  the  views 
of  the  compradors  attached  to  the  great  mercan- 
tile houses  in  China  with  reference  to  the  Reform 
movement.  These  men  are  among  the  best  edu- 
cated and  most  intelligent  of  the  Chinese  gentle- 
men ;  they  are  also  fully  conversant  not  only  with 
the  affairs  of  their  own  country,  but  with  Western 
ideas  of  civilization  and  progress.  I  found  several 
of  them  very  outspoken  in  their  opinions  as  to  the 
necessity  for  Reform;  they  all  were  of  opinion 
that  the  Reform  movement  had  been  pressed  for- 
ward too  quickly,  and  without  the  organization  ne- 
cessary to  insure  its  success. 

My  second  visit  to  Hong  Kong  was  on  the 
25th  of  December,  1898. 

During  this  visit  I  received  a  number  of  Reso- 
lutions passed  by  the  Hong  Kong  Chamber  of 
Commerce,  a  copy  of  which  will  be  found  in  the 

There  are  no  complete  official  returns  of  the 
Imports  or  Exports,  owing  to  the  absence  of  Cus- 



toms,  Hong  Kong  being  a  free  port ;  but  the  value 
of  the  trade  of  the  port  is  estimated  at  about  ;^50r 
000,000  per  annum. 

The  China  Association  also  gave  me  a  number 
of  Resolutions,  which  are  to  be  found  in  the  Ap- 

I  found  the  British  merchants  in  Hong  Kong 
very  nervous  as  to  the  future  position  of  British 
trade  and  British  influence  in  China.  They  were 
as  strongly  opposed  to  the  policy  described  as 
Spheres  of  Influence  as  the  whole  of  the  other 
British  communities  I  conferred  with  during  my 
journeys  in  China.  They  declared  that  the  late 
policy  of  the  British  Government  had  voluntarily 
acknowledged  the  exclusive  rights  of  Russia  and 
Germany.  By  the  action  of  her  Government, 
Great  Britain  had  acquiesced  in  a  policy  of 
Spheres  of  Influence,  the  exact  counterpart  of 
the  Open  Door  policy  so  determinedly  supported 
a  short  time  ago  by  the  members  of  the  Cabinet. 
The  merchants  were  of  opinion  that  the  Russian, 
German,  and  French  Spheres  of  Influence  were 
recognized.  They  pointed  out  that  the  policy  de- 
scribed as  the  "  Open  Door"  is  the  only  one  under 
which  there  can  be  reasonable  hope  of  the  future 
prosperity  and  development  of  British  trade  in 
China.  They  held,  however,  that  it  was  no  use  de- 
claring for  such  a  policy  unless  means  were  taken 
for  carrying  it  out,  and  insuring  its  success  and 
continuance.     They  also  gave  me  as  their  opinion 

that,  even  if  the  policy  of  the  Open  Door  was  in- 



sured,  some  means  must  be  taken  for  removing  all 
chance  of  disturbances  in  the  country  beyond  the 
area  of  the  open  ports ;  that  the  great  drawback 
to  the  improvement  of  trade,  increase  of  manufact- 
ures, and  development  of  industries  was  the  rev- 
enue system  in  China;  but  that  this  vital  question 
could  not  be  taken  in  hand  until  the  security  for 
trade  which  the  British  merchant  had  a  right  to 
demand  was  reigning  throughout  the  Empire. 

The  merchants  laid  stress  upon  the  position  oc- 
cupied by  France  in  the  South.  They  declared 
that  Great  Britain  ought  to  indicate  clearly  that 
the  immense  amount  of  British  trading  interests 
in  the  provinces  of  Kwangtung  and  Kwangsi  were 
such  as  to  make  it  impossible  for  her  ever  to  allow 
under  any  conditions  prohibitive  tariffs  similar  to 
those  put  on  in  Madagascar  and  Indo-China. 

Assuming  that  British  trade  means : 

(i)  Trade  with  Hong  Kong. 

(2)  Trade  with  other  places  in  British  ships. 
I  asked  the  British  merchants  to  give  me 
some  detailed  proofs  as  to  the  trade  exist- 
ing between  these  two  provinces  (Kwangsi 
and  Kwangtung)  and  Great  Britain,  in  order 
that  the  Associated  Chambers  of  Commerce 
might  see  the  reasons  for  a  demand  couched 
in  such  strong  terms. 

I  was  supplied  with  the  following  Tables : 



IN    KWANGTUNG   AND    KWANGSI,    1893-1897 


Name  of 




Value  of  Trade  with  Ports  other 
than  Hong  Kong 







Swatow    . 











Haihow  . 








3. « 35.983 




Wuchow . 





Samshui  . 




Total     . 



1. 327. 1 37 



British  Tonnage =  80^ 

8o{r  of  Value  of  Trade =    1,978,388 

Hong  Kong  Trade,  other  than  Junks — 
Imports  ....     18,667,110 
Exports  ....    25 


I    =43.745,550 
,078,440  ) 

Hong  Kong  Trade,  Junks — 

Imports  ....     18,937,126 

Exports  . 

•         «         ■ 


=  39.938.720 


IN  KWANGTUNG  AND  KWANGSI,  1893-1897.— 


Name  of 




Value  of  Trade  with  Ports  other 
than  Hong  Kong 






Swatow   . 






Pakhoi     . 




Haihow   . 




1 2,627 


Canton     . 






Wuchow , 



Samshui  . 



Total     . 






British  Tonnage =  %o% 

8oj<  of  Value  of  Trade =    1,744,209 

Hong  Kong  Trade,  other  than  Junks — 
Imports  ,    .    .    .     18,949,753 
Exports  ....    26,418,756 

Hong  Kong  Trade,  Junks- 
Imports  ....     19,665,908 

Exports  ....    18,765,289 


>    =45.368, 


=  38.43^^97 


IN  KWANGTUNG  AND  KWANGSI,  1 893-1 897.— 


Name  of 




Value  of  Trade  with  Ports  other 
than  Hong  Kong 






Swatow    . 






Pakhoi    . 






Haihow  . 






Canton    . 






Wuchow . 



Samshui  . 


Total     . 






British  Tonnage =  80$^ 

80^  of  Value  of  Trade =    5,469,090 

Hong  Kong  Trade,  other  than  Junks — 

Imports  ....    20,544,099) 

\    =  45.640,649 
Exports  ....    25,086,550) 

Hong  Kong  Trade.  Junks — 

Imports  ....    22,678,090 

Exports  ....    25 


,678,090  ) 
.041.325  ) 

=  47,719415 


IN  KWANGTUNG  AND  KWANGSI,  1893-1897.— 


Name  of 




Value  of  Trade  with  Ports  other 
than  Hong  Kong 




'  Exports 


Swatow    . 
Pakhoi     . 
Haihow  . 
Canton    . 
Wuchow . 
Samshui  . 













Total     . 






British  Tonnage =    75^^ 

753^  of  Value  of  Trade =    2,366.871 

Hong  Kong  Trade,  other  than  Junks — 
Imports  ....    21.025,663 
Exports  ....    24,221,370 

Hong  Kong  Trade.  Junks- 
Imports  ....    22,565,590 

Exports  . 

*    •    • 


=  45.247.033 

=  47.171.980 


IN  KWANGTUNG  AND  KWANGSI,  1893-1897.— 


Name  of 




Value  of  Trade  with  Ports  other 
than  Hong  Kong 






Swatow    . 












Haihow  . 






Canton    . 






Wuchow . 






Samshui  . 





Tot^l     . 






British  Tonnage =  Tl% 

7S%  of  Value  of  Trade =    2,203,205 

Hong  Kong  Trade,  other  than  Junks — 
Imports  ....    24,807,430 
Exports  ....    28,159,946 

Hong  Kong  Trade,  Junks — 

Imports  ....    23,024,493 

Exports  ....     16,967,118 


=  52,967*376 

=  39.99i»6ii 



Hk.  Tls, 

Average  Estimated  Value  of  Trade 
in  British  Ships  with  Ports  other 
than  Hong  Kong 2,752,352 

Average     Estimated     Trade    with 

Hong  Kong  not  including  Junks       46^593,823 

Average   Trade  with    Hong  Kong 

in  Junks 42,650,584 

Average  Estimated  Value  of 
British  Trade 91,996.759 

A  comparison  of  British  and  French  trade  is 

to  be  found  in  the  chapter  on  "  Canton." 


M       I 




The  question  connected  with  the  position  of 
the  Chinese  Custom  House  at  Kowloon  has  for 
some  considerable  time  been  exercising  the  minds 
of  all  British  merchants  at  Hong  Kong.  The 
matter  has  now  reached  a  more  acute  stage  owing 
to  the  recent  extension  of  the  area  of  the  colony, 
which  makes  Kowloon  British  property  instead  of 

The  existing  arrangements  were  made  in  the 
year  1884,  at  the  request  of  the  Chinese  Customs, 
in  order  to  protect  Chinese  revenue,  particularly 
against  the  opium  farmer.  The  arrangements 
were  as  follows : 

The  Custom  House  was  to  be  officially  at  Kow- 
loon, in  Chinese  territory.  All  documents  were 
dated  from  that  place.  As  a  matter  of  fact,  the 
Customs  House  is  really  in  Hong  Kong,  where 
all  business  is  done. 

The  name  of  the  Customs  House  Agent  is  put 
over  the  door,  but  officially  the  place  is  not  recog- 
nized as  a  Customs  House  proper. 

The  following  points  in  connection  with  this 
question  were  brought  to  my  notice  by  the  British 
merchants  at  Hong  Kong : 

That  the  original  reason  for  permitting  the 
Chinese  Customs  to  establish  themselves  in  and  j 

about  Hong  Kong  was  the  collection  of  opium 

revenue.    Now  the  Chinese  Customs  not  only  col-  1 

204  j 



lect  the  duties  on  opium  for  Chinese  Imperial  pur- 
poses, but  also  general  duties  on  goods  and  mer- 
chandise inside  the  area  of  the  British  colony  for 
the  provincial  as  well  as  the  Imperial  Govern- 

They  declared  that  the  Customs  have  practically 
blockaded  Hong  Kong,  and  the  system  employed 
is  such  as  to  offer  considerable  obstruction  to  the 
development  of  trade  by  native  traders,  principally 
brought  about  by  illegal  search  without  warrants 
in  British  waters.  There  is  great  difficulty  in 
proving  such  cases,  because  native  evidence  only 
is  available  on  the  British  side,  while  on  the  Im- 
perial Chinese  Customs  side  European  evidence  is 
always  to  be  obtained  in  the  person  of  the  officer 
commanding  the  Customs  launch. 

Since  the  year  1884  the  European  trade  has 
increased  in  tonnage  from  6,859,274  to  12,124,599, 
but  the  merchants  point  out  that  this  increase  is 
not  so  much  due  to  development  of  trade  in  the 
towns,  villages,  and  country  districts  of  China  as 
to  increased  development  of  the  trade  with  Japan, 
Formosa,  and  the  Treaty  Ports.  They  point  out 
that  the  Customs  House  system  has  kept  the  junk 
trade  almost  stationary,  it  having  only  increased 
from  3,375,188  in  1884  to  3,441,295  in  1897. 

The  Inspector- General  of   Chinese   Maritime 

Customs  has  lately  requested  official  recognition 

of  the  Chinese  Customs  House  at  Hong  Kong, 

which  up  to  now  has  only  been  allowed  to  exist  in 

the  colony  on  the  understanding  that  the  Hong 



Kong  Government  reserve  the  right  to  cancel  the 
arrangement.  They  complain  that  the  fact  of 
having  a  Chinese  Custom  House  on  British  soil 
is  an  anomaly  which  would  not  be  permitted  in 
any  other  colony,  and  that  the  absurdity  and  irri- 
tation of  such  a  system  would  be  well  exemplified 
by  placing  a  Customs  House  within  the  lines  at 
Gibraltar  for  collecting  Spanish  Customs  dues. 
The  merchants  were  very  distinct  in  stating  that 
they  wished  to  do  nothing  unfriendly  to  China, 
and  to  prove  this  they  are  prepared  to  guarantee 
the  opium  revenue,  and  to  take  every  precaution 
that  the  Chinese  revenue  should  not  suffer  by  the 
change.  This  they  were  willing  to  do,  although 
they  were  aware  that  it  would  inflict  a  loss  to  the 
colony  of  about  ;^38,ooo  a  year — the  sum  paid 
by  the  opium  farmer  as  rent  to  the  Hong  Kong 

I  made  it  my  business  to  find  out  the  opinion 
of  the  Chinese  traders  themselves  as  to  shifting 
the  Chinese  Customs  House  from  British  to  Chi- 
nese property,  and  as  far  as  I  could  gather  they 
were  unanimously  in  favor  of  such  a  change.  The 
two  Chinese  members  of  the  Legislative  Council 
of  Hong  Kong — Dr.  Ho  Kai  and  Mr.  Weityuk — 

were  both  in  favor  of  this  proposed  change.  It  is, 
however,  proper  to  add  that  I  could  get  no  evi- 
dence that  the  junk  masters  and  Chinese  mer- 
chants had  actually  complained  of  the  Chinese 
Customs  House  being  on  British  territory. 

It  may  be  interesting  for  the  Associated  Cham- 



bers  of  Commerce  to  have  some  details  respect- 
ing the  opium  farm.  I  visited  the  farm  on  Decem- 
ber 31,  1898,  and  saw  the  manner  in  which  the 
opium  was  prepared.  The  present  opium  farmer 
has  a  contract  with  the  Government  for  three 
years  at  a  rent  of  ;^3ioo  a  month.  He  sells  an 
average  of  eight  to  ten  tins  of  opium  a  day.  The 
tins  are  about  9  in.  by  6  in.,  and  contain  about 
£2fi>  worth  of  opium,  thus  making  from  ;^7200  to 
;^9000  a  month.  The  trade  would  appear  a  very 
lucrative  one. 

The  opium  farmer  is  known  to  be  the  largest 
smuggler  of  opium  into  the  country.  If  he  did 
not  smuggle  he  could  not  afford  to  pay  the  large 
rent  demanded  by  the  Government. 

Thus,  indirectly,  the  Hong  Kong  Government 
derives  a  revenue  by  fostering  an  illegitimate  trade 
with  a  neighboring  and  friendly  Power,  which  can- 
not be  said  to  redound  to  the  credit  of  the  British 
Government.  It  is  in  direct  opposition  to  the  sen- 
timents and  traditions  of  the  laws  of  the  British 

Having  given  clearly  the  opinions  of  the  British 
merchants  in  regard  to  this  important  question,  I 
made  it  my  business  to  find  out  the  opinions  of  the 
responsible  authorities  in  charge  of  the  Imperial 
Maritime  Customs  of  China. 

Through  their  kindness  I  was  able  to  obtain 

what  may  be  said  to  represent  their  views  of  the 


They  are  as  follows : 


.  I 


Memo,  regarding    Chinese   Customs   at    Hong 

Kong — Kowloon. 

1.  Hong  Kong  to  formally  recognize  Kowloon 
Commissioner.  His  duties  to  be  specified.  Facili- 
ties for  carrying  them  out  to  be  given.* 

2.  Opium  landed  to  be  stored  under  Colonial 
Bond,  only  to  be  allowed  to  leave  with  Colonial 
permit  and  Customs  counter-signature. 

Customs  to  have  right  to  examine  go-downs,  etc., 
in  company  with  Colonial  officer  at  all  reasonable 

3.  Colonial  officer  to  specially  supervise  opium 
farmer's  operations,  jointly  with  Customs  man. 
Farmer  to  report  to  Colonial  officer  all  opium 
(prepared)  intended  for  shipment,  with  destina- 
tion, etc. 

4.  Munitions  of  war  not  to  be  shipped  on  junks 
without  Colonial  permit,  countersigned  by  Customs. 

5.  Customs  vessels  to  have  national  status.  No 
seizures  to  be  made  on  vessels  under  way  within 
Colonial  waters.  Where  questions  of  seizure  in 
doubtful  waters  arise  to  be  jointly  investigated. 

*  Establishment  to  be  known  as  "  Kowloon  Customs." 
Presence  in  Hong  Kong  admittedly  by  favor  of  British 
Government.  Commissioner  to  be  Englishman.  Whole  ar- 
rangement liable  to  withdrawal  if  head  of  Chinese  Customs 
Service  not  an  Englishman.  Great  Britain  may  appoint  an 
officer  (?)  Consular  or  Colonial  to  reside  in  Kowloon.  Chi- 
nese officer  appointed  to  Kowloon  not  to  be  under  a  certain 
rank ;  name  to  be  submitted  to  Hong  Kong  Government  be- 
fore appointment. 



6.  Hong  Kong  Government  to  assist  Customs 
by  its  officers  to  carry  out  Hong  Kong  law,  and 
not  Chinese  revenue  officers ;  and  they  may  be  re- 

7.  Hong  Kong  Government  to  legislate  as  may 
be  necessary  to  give  effect  to  this  understanding. 

8.  China  to  give  trade  facilities  in  certain  direc- 
tions— €,g.,  in  issue  of  transit  passes,  inland  water 
navigation,  direct  trade  with  West  River  ports  of 
call,  and  in  other  directions  where  same  may  be 

9.  Arrangement  to  be  liable  to  modification  after 
certain  named  time  or  specified  notice. 

I  also  received  the  following  resolutions,  passed 
unanimously  by  the  Hong  Kong  General  Cham- 
ber of  Commerce,  September  i.  1898: 

"  I.  That  the  Custom  Offices  be  no  longer 
permitted  to  collect  duties  in  the  colony  or 
its  waters. 

**  2.  That  all  opium  arriving  in  the  colony 
be  accounted  for  either  through  the  agency  of 
bonded  warehouses  or  otherwise. 

"3.  That  the  Government  do  all  in  their 
power  to  protect  the  Chinese  revenue,  more 
especially  with  regard  to  the  opium  farmer. 

"  That  the  revenue  stations  and  revenue 
cruisers  be  removed  beyond  the  limits  of 
British  territory  and  British  waters." 

The  British  merchants  have  represented,  over 

and  over  again,  that  the  Chinese  Customs  arrange- 
o  209 


ments  for  collecting  revenues  at  Hong  Kong  work 
seriously  to  the  injury  of  legitimate  trade,  that  it 
interferes  with  the  freedom  of  the  port,  and  that  it 
is  a  great  impediment  to  the  general  development 
of  the  trade  of  the  colony. 

Both  sides,  the  British  community  and  those 
representing  the  Chinese  Maritime  Customs,  seem 
anxious  to  adjust  their  differences  in  a  friendly 
manner.  On  the  side  of  the  Chinese  Customs  the 
authorities  work  in  the  line  which  they  consider 
best  for  the  interests  of  the  Government  they  serve. 
On  the  British  side,  the  merchants  have  clearly 
pointed  out  that  the  present  system  is  harmful  to 
the  interests  of  British  trade.  At  the  same  time 
it  must  always  be  remembered  that  the  Customs 
Service  is  not  regarded  with  any  great  affection  by 
the  merchants  of  any  country.  If  the  Associated 
Chambers  thought  wise  to  press  this  question  for- 
ward, there  can  be  no  doubt  that  a  satisfactory 
settlement  would  shortly  be  arranged,  and  Anglo- 
Saxon  trade  and  commerce  materially  benefited. 

Before  I  left  Hong  Kong  Mr.  Gray  called  a 
meeting  of  the  Chamber  of  Commerce,  of  which 
body  he  is  Chairman.  A  summary  of  the  speeches 
made  at  this  important  meeting  may  be  interest- 
ing to  the  Associated  Chambers  of  Commerce  of 
Great  Britain."  The  members  desired  me  to  thank 
the  Associated  Chambers  of  Commerce  for  having 
sent  a  Mission  to  China  to  inquire  into  the  state 
of  British  trade  and  commerce.  They  said  that 
such  an  inquiry  was  imperative  for  British  inter- 



ests  under  the  present  condition  of  affairs  in 
China.  They  declared  that  every  one  interested 
in  trade  in  China  must  regard  the  Open  Door  prin- 
ciple as  essential  to  its  existence.  They  pointed 
out  that,  notwithstanding  all  the  efforts  of  Consuls 
and  Chambers  of  Commerce,  British  treaties  with 
China  were  deliberately  flouted  in  the  matter  of 
provincial  exactions;  and  that  trade  could  never 
expand  as  long  as  it  was  burdened  by  indefinite 
inland  taxes.  They  also  desired  me  to  request 
the  Associated  Chambers  of  Commerce  to  use 
their  influence  to  have  the  commercial  clauses 
of  the  Treaty  of  Tientsin  carried  out  in  their 

In  the  Appendix  will  be  found  a  copy  of  Reso- 
lutions passed  at  a  meeting  of  Chinese  merchants 
and  traders  resident  in  Hong  Kong,  held  at  the 
Chinese  Chamber  of  Commerce  Rooms,  on  Sun- 
day, January  22,  1899. 

I  received  the  following  address  from  the  Chi- 
nese merchants  at  Hong  Kong  after  my  return  to 
England  in  March,  1899,  and  place  it  in  the  Re- 
port to  show  the  Chinese  view  of  the  situation  in 

"  To  Rear-Admiral  Lord  Charles  Beresford, 
CB.,  M.P.: 

"Your  Lordship, — We  humbly  crave  your 
Lordship's  permission  to  address  to  you  a  few 
remarks  on  the  China  question,  both  in  its  politi- 
cal and  commercial   aspects,  for  the  satisfactory 



solution  of  which,  with  noble  self-denial  and  char- 
acteristic energy,  you  have  travelled  to  the  Far 
East,  and,  while  there,  have  spared  neither  time 
nor  trouble  in  making  personal  observations  and 
gathering  useful  information.  We,  together  with 
the  leading  Chinese  merchants  and  residents, 
should  have  approached  you  during  your  brief 
sojourn  in  Hong  Kong,  but  we  were  prevented 
from  so  doing  by  two  considerations,  one  of  which 
was  that  your  Lordship's  already  limited  time  was 
completely  occupied  with  important  public  and 
social  functions  in  connection  with  the  British 
and  foreign  communities ;  the  other  was  of  a  far 
more  serious  character,  and,  we  venture  to  think, 
deserves  the  earnest  attention  of  your  Lordship 
and  of  the  British  Government  and  Parliament, 
especially  at  the  present  juncture  in  China.  It 
was  the  hidden  cause  of  many  apparently  inex- 
plicable instances  of  the  backwardness  of  those 
Chinese  who  have  been  accorded  the  distinguished 
privilege  of  becoming  subjects  of  the  mightiest  and 
most  glorious  Empire  the  world  has  ever  seen ;  it 
has  prevented  their  co-operation  with  the  British 
authorities  in  all  international  questions  between 
the  British  and  Chinese  Empires.  It  is  nothing 
less  than  the  dread  of  the  Chinese  mandarins,  and 
the  total  absence  of  protection  from  the  British 
Government,  that  has  hitherto  kept  the  British- 
born  or  naturalized  Chinese  from  taking  openly 
any  intelligent  interest  or  active  part  in  the  politi- 
cal and  commercial  relationship  between  these  two 



great  nations.  For  some  reason  or  other  the  Con- 
sular Authorities  representing  the  British  Govern- 
ment in  China  have  persistently  refused  recogni- 
tion and  protection  to  British  subjects  descended 
from  the  Chinese  race  who  happened  to  be  in  Chi- 
nese territory,  or  travelling  for  commercial  or  social 
purposes,  and  they  are  left  to  the  tender  mercies 
of  the  Chinese  officials,  who  have  thus  golden  op- 
portunities for  filling  their  pockets  or  paying  off 
old  scores. 

"  This  policy  on  the  part  of  the  British  officials 
concerned  is  as  enigmatical  to  us  as  it  is  contrary 
to  the  practice  of  the  Representatives  of  other 
European  Powers — such  as  the  French,  German, 
Russian,  Portuguese — and  American,  and  even  the 
Japanese,  who  each  and  all  afford  the  fullest  meas- 
ure of  protection  to  their  Chinese  subjects  in  the 
open  ports  or  the  interior  of  China.  The  rule  of 
every  British  Consulate  throughout  China  appears 
to  be  to  make  the  granting  of  protection  to  Great 
Britain's  Chinese  subjects  a  matter  of  extreme 
difficulty,  if  not  of  impossibility.  They  make  irk- 
some and,  in  many  instances,  impracticable  regu- 
lations, and  insist  upon  some  stringent  and  almost 
impossible  conditions.  By  these  means  they  ef- 
fectually block  the  claim  of  protection  by  the 
great  majority,  if  not  all,  of  their  Chinese  sub- 

"  As  an  example,  we  may  mention  the  rule  of 

distinctive  dress,  where  it  is  provided  that  a  British 

Chinese  subject  claiming  British  protection  must 



cut  off  his  qtieue  and  change  his  long-accustomed 
mode  of  dress.  What  the  effect  of  such  a  rule  on 
the  Chinese  would  be  we  can  safely  leave  to  your 
Lordship  to  imagine,  and  we  need  only  add  that  no 
other  foreign  nation  in  China  has  thought  it  fair 
or  wise  to  impose  such  conditions  on  their  Chi- 
nese subjects.  The  excuse  put  forward  for  these 
unusual  proceedings  on  the  part  of  the  Consular 
Authorities  is  the  fear  of  international  complica- 
tions. But,  as  yet,  we  are  not  aware  of  any  single 
case  where  serious  complications  have  taken  place, 
if  we  except  the  numerous  troubles  connected  with 
foreign  Christian  missions.  On  the  other  hand, 
even  though  some  insignificant  international  fric- 
tion might  be  caused  by  extending  protection  to 
Anglicized  Chinese,  would  that  not  be  outweighed 
by  the  many  resulting  advantages  to  British  pres- 
tige and  influence?  After  this,  your  Lordship 
will  not  be  surprised  to  learn  that  the  Chinese  in 
Hong  Kong,  or  elsewhere,  being  British  subjects, 
should  prefer  silence  to  healthy  discussion,  reserve 
to  active  participation,  crafty  device  to  manly  de- 
termination, equivocal  support  to  loyal  co-oper- 
ation. The  close  proximity  to  the  main-land,  the 
frequent  calls  M  duty  or  pleasure  to  the  interior,, 
the  utter  corruption,  and  squeezing  propensities  of 
the  native  officials,  their  revengeful  and  arbitrary 
spirit,  the  close  espionage  exercised  upon  the  na- 
tives by  the  Chinese  Government,  together  with 
the  want  of  protection  from  the  British  Author- 
ities, must  account  for  all  that  seemed  cold  and  in- 



different  in  the  Chinese  respecting  topics  of  mo- 
mentous and  international  interest. 

"  Notwithstanding  this,  however,  your  Lord- 
ship's important  Mission  to  the  Far  East  and 
your  recent  public  utterances  have  aroused  uni- 
versal and  intense  interest  among  the  Chinese, 
especially  those  who  are  residing  in  the  open 
ports  or  under  the  aegis  of  the  British  flag.  The 
policy  of  the  '  Open  Door,'  so  ably  enunciated  and 
advocated  by  you,  met  with  their  cordial  approval 
and  support,  as  being  the  only  means  whereby 
Great  Britain's  commerce  in  China  can  be  pre- 
served and  extended,  the  Chinese  Empire  kept  in- 
tact, and  her  tradal  and  political  relationships 
with  other  foreign  nations  improved.  This  policy, 
simple  and  effective  though  it  be,  will,  we  appre- 
hend, be  opposed  by  the  many  who  deem  it  to  be 
national  glory  when  a  new  territory  is  acquired 
and  a  Sphere  of  Influence  gained,  utterly  disre- 
garding the  dangers  and  evil  consequences  that 
such  acquisition  may  involve.  We  have,  however, 
the  greatest  confidence  in  your  Lordship,  and  we 
are  assured  that  the  great  British  public  and  lead- 
ing statesmen  will  readily  listen  to  the  wise  advice 
of  one  whose  name  is  a  household  word,  ability 
unsurpassed,  courage  indomitable,  judgment  unbi- 
assed, public  spirit  loyal  and  enthusiastic,  and  whose 
discernment,  aided  by  personal  experience  and  ob- 
servation, is  true  and  unclouded.  The  issue  in  the 
hands  of  such  an  advocate  will  and  must  be  successful 

in  spite  of  all  the  opposition  that  may  be  interposed. 



"  We  believe  the  active  support  of  the  United 
States  of  America,  of  Germany,  and  of  Japan  can 
well  be  counted  on,  as  their  interests  are  identical 
with  those  of  Great  Britain,  and  they  cannot  hope 
to  gain  any  material  advantage  by  the  disintegra- 
tion of  China  and  the  restriction  of  trade  in  that 
Empire,  We  are  certain  also  that  the  Chinese 
will  yet  fully  appreciate  the  manifold  benefits  of 
this  *  Open  Door '  policy,  and  will  do  their  utmost 
to  assist  in  its  maintenance.  They  cannot  fail  to 
understand  that  the  integrity  of  their  own  country, 
nay,  their  very  existence  as  a  nation,  depends  upon 
the  firm  adherence  to  this  principle.  The  devel- 
opment of  their  commerce,  industry,  and  natural 
resources  is  equally  dependent  upon  its  being  up- 
held by  the  strongest  and  freest  of  all  nations. 
Besides,  the  Chinese  people,  having  great  apti- 
tude and  inclination  for  trade,  have  naturally  at 
all  times  a  particular  leaning  towards  England,  the 
greatest  commercial  nation  in  the  universe.  In 
addition  to  this,  the  justice  and  liberty  that  char- 
acterize the  British  laws  and  constitution,  the  per- 
fect and  impartial  protection  which  Great  Britain 
affords  to  all  who  dwell  or  trade  under  her  flag 
(with  the  one  exception  already  alluded  to),  make 
her  a  favorite  with  the  Chinese,  so  that  whenever 
England  should  give  a  clear  indication  that  she 
will  carry  out  the  policy  recommended  by  your 
Lordship,  she  will  not  find  the  Chinese  behind- 
hand in  tendering  their  support  and  adherence, 

"  But  what  support  could  China  give  and  of  what 



value  is  her  adherence  to  this  policy  ?  Very  little, 
indeed,  we  admit.  As  has  been  pointed  out,  she 
has  no  army  or  navy  worth  recognizing  as  such. 
She  is  nearly  rent  asunder  by  internal  dissensions 
and  rival  factions.  Her  officials  are  the  most  cor- 
rupt and  notoriously  incompetent ;  her  revenue  is 
ridiculously  insufficient,  and  already  overcharged 
with  payment  of  interest  on  foreign  loans ;  her 
land  is  infested  with  rebellious  bands  and  lawless 
mobs;  her  people  are  ignorant  and  full  of  prejudice 
and  pride.  All  these  evils,  and  many  more  which 
we  at  present  forbear  to  enumerate,  wellnigh 
render  the  carrying  out  of  this  policy  on  her  soil 
a  matter  of  impossibility,  and  seem  to  force  upon 
the  mind  of  every  casual  observer  the  conviction 
that  nothing  but  actual  partition  would  solve  the 
problem  of  her  future  destiny.  This,  however,  was 
never  our  opinion,  and  we  are  exceedingly  glad 
that  your  Lordship,  after  careful  study  on  the  spot, 
is  in  accord  with  us. 

"  Great  Britain  requires  in  China  the  *  Open 
Door 'and  not  a 'Sphere  of  Influence,'  and  China 
needs  radical  reform  and  not  absorption  by  any  for- 
eign Power  or  Powers.  But  it  is  quite  apparent  im- 
mediate reformation  must  be  inaugurated.  With- 
out reformation  the  administration  of  the  Chinese 
Empire  will  speedily  become  impossible ;  partition 
will  become  inevitable ;  and  Great  Britain  will  have 
no  choice  but  to  join  in  the  international  scramble 
for  '  Spheres  of  Influence.'     It  is  also  clear  that 

without  external  aid  or  pressure  China  is  unable 



to  effect  her  own  regeneration.  For  obvious  rea- 
sons— personal  gain  and  aggrandizement — those 
who  hold  high  office,  those  who  constitute  her  rul- 
ing class,  do  not  desire  Reform  ;  those  in  humbler 
life,  forming  her  masses,  wish  Reform,  but  are 
powerless  to  attain  it.  In  this  predicament  we 
venture  to  think  that  England,  having  the  predom- 
inant interest  in  China,  and  being  the  country  most 
looked  up  to  and  trusted  by  the  Chinese,  should 
come  forward  and  furnish  the  assistance  and  apply 
the  requisite  pressure.  This,  we  are  aware,  may 
be  objected  to  as  being  a  too  stupendous  task, 
and  beyond  the  strength  of  Great  Britain ;  on  the 
other  hand,  we  believe  she  has  the  resources  to 
enable  her  to  undertake  the  work,  and  when  we 
recall  the  magnificent  successes  achieved  in  India 
and  in  Egypt,  and  other  parts  of  the  world,  we  are 
confident  that  even  greater  successes  will  crown 
British  effort  and  energy  in  China. 

"  We  agree  with  your  Lordship  that  China,  in 
order  to  maintain  her  integrity  and  the  *Open 
Door,*  and  to  protect  property  and  capital  sunk  in 
her  vast  territory,  must  have  an  effective  army  and 
police ;  but  we  humbly  submit  that,  before  these 
desirable  objects  could  be  attained,  some  reform 
in  other  directions  should  be  effected.  We  have 
not  forgotten  yet  what  became  of  the  Ever- Vic- 
torious Army  under  General  Gordon,  or  the  end 
of  the  once  formidable  fleet  under  Admiral  Lang. 
We  have  heard  from  your  Lordship's  own  lips  what 
ridiculous  things  have  been  done  in  the  Arsenal  at 



Foochow,  which  has  been  established  for  a  great 
number  of  years  under  foreign  direction,  and  has 
cost  the  Chinese  Government  immense  sums  of 
money.  We  also  remember  your  remarks  upon 
the  forts  and  magazines  at  Canton  and  elsewhere 
in  China.  Your  Lordship  has  found,  as  a  matter  of 
fact,  that  certain  sums  of  money  set  aside  by  the 
Chinese  Government  for  particular  objects  were 
discovered  to  be  wofully  deficient  after  having 
passed  through  the  hands  of  the  native  officials, 
whereas,  if  properly  applied,  these  sums  would  have 
been  sufficient  for  the  purposes  for  which  they 
were  allocated. 

"  These  facts,  and  many  more,  support  our  con- 
tention that  China  requires  something  much  more 
urgently  than  an  effective  army  and  police.  Sup- 
posing it  is  possible  to  furnish  China  to-morrow 
with  a  well-disciplined  army  and  a  perfectly  organ- 
ized police,  we  are  quite  certain  that  neither  force 
will  be  maintained  in  an  efficient  state  for  a  year 
and  a  day.  China  s  corrupt  Government  and  her 
peculating  officials  would  starve  out  either  or  both 
of  the  forces.  History  will  repeat  itself.  It  has 
been  pointed  out  to  us  that  Turkey,  although  her 
Government  is  as  bad  as,  if  not  worse  than,  China's, 
has  been  preserved  to  this  day  by  having  a  good 
army  and  a  passable  navy,  and  that  if  we  wish  to 
maintain  the  integrity  of  the  Chinese  Empire  a 
large  and  well -disciplined  army  is  indispensable. 
But,  in  our  opinion,  something  else  must  first  be 

done  in  order  to  lay  the  permanent  foundation  of 



a  truly  useful  army,  navy,  and  police.  If  we  are  to 
have  a  reformation  at  all  in  China,  let  it  be  a  thor- 
ough one.  Let  us  begin  at  the  very  root.  We 
should  be  very  sorry  indeed  to  see  China  in  the 
position  of  Turkey,  bad  as  her  condition  is  already. 
Even  with  her  army  and  her  navy,  China  would 
be  the  continual  *sick  man '  of  the  Further  East; 
she  would  be  the  bone  of  contention  among  the 
European  Powers,  the  frequent  cause  of  inter- 
national dispute  or  even  of  war.  She  would  be- 
come the  scene  of  atrocities,  massacres,  and  blood- 
shed, and  the  centre  of  the  most  abominable  and 
corrupt  governments.  In  fact,  she  would  be,  as  it 
were,  a  festering  sore  in  the  sight  of  the  civilized 
world.  Rather  than  this,  for  humanity's  sake,  we 
would  prefer  to  see  China  partitioned  at  once, 
and  good  government  introduced  by  the  dividing 
Powers.  National  death  is  preferable  to  national 
dishonor,  corruption,  and  degeneration. 

"  The  urgent  reforms  before  others  we  would 
like  to  recommend  for  China's  adoption  are  two  in 
number:  First,  a  system  of  adequate  salaries  to 
her  officials;  and  secondly,  a  thorough  overhaul 
of  her  system  of  collecting  her  inland  revenue,  her 
taxes,  and  crown  rents.  We  recommend  further 
that  if  China  be  unable  or  unwilling  to  undertake 
these  absolutely  necessary  reforms.  Great  Britain, 
either  single-handed  or  in  conjunction  with  some 
other  Power,  should  render  China  substantial  as- 
sistance, and,  if  need  be,  apply  firm  pressure  on  the 

Central  Authorities  at  Peking. 



"  We  earnestly  assure  your  Lordship  that  from 
our  intimate  knowledge  of  the  Chinese  and  the 
Chinese  Government,  their  nature  and  their  ways, 
it  will  be  absolutely  impossible,  failing  reform  in 
these  two  particulars,  to  accomplish  any  improve- 
ment upon  her  condition  ;  to  uphold  the  policy  of 
the  'Open  Door' — by  which  we  understand  the 
maintenance  of  the  integrity  of  China,  the  free- 
dom of  trade  and  commerce  within  her  territories, 
without  restrictive  or  protective  tariffs,  and  the 
common  participation  by  all  foreign  nations  alike 
in  all  the  privileges,  rights,  and  concessions  ob- 
tained by  any  one  of  them. 

"  Permit  us,  my  Lord,  to  give  you  some  facts  in 
connection  with  the  wretched  pay  of  the  Chinese 
officials  and  the  evils  resultant  therefrom.  It  is 
well  known  to  all  of  us  that  a  high  mandarin  in 
the  capital  of  China,  of  Cabinet  rank,  does  not  get 
by  regulation  any  more  than  ;^5o  a  year  as  salary. 
In  addition  to  this,  however,  he  has  certain  allow- 
ances, which  may  possibly  make  up  his  whole 
emoluments  to  about  ;^200  or  ;^25o  per  annum. 
Upon  this  pittance  he  is  expected  to  keep  up  his 
position,  his  family,  his  retinue,  his  staff,  secreta- 
ries, advisers,  etc.,  besides  entertaining  guests  and 
colleagues.  In  point  of  fact,  he  requires  from  ten 
to  twenty  times  the  amount  to  meet  all  his  ex- 
penses. A  Viceroy  in  the  provinces  has  a  more 
liberal  salary.  He  gets  as  his  yearly  official  sal- 
ary about   ;^ioo,  and   allowances   amounting  to 

about  ;^9cx>  to  £  1 200  more ;   but,  unfortunately, 



he  has  to  defray  out  of  these  sums  all  his  ya- 
men  expenses,  including  stationery,  etc.,  salaries 
and  food  to  his  secretaries,  writers,  and  A.D.C, 
his  body-guards  and  general  retinue.  In  addition 
to  this,  he  has  to  entertain  his  innumerable  guests, 
and  send  his  annual  tributes  to  the  various  high 
officials  in  the  capital,  to  say  nothing  of  support- 
ing his  high  station,  his  numerous  family  and  re- 
lations. As  a  matter  of  fact,  to  meet  all  his  ex- 
penditure, he  would  require  no  less  than  ;^  10,000 
or  ;^ 1 5,000  per  annum.  A  General  in  the  army 
or  an  Admiral  in  the  navy  gets  less  than  ;^400  a 
year  as  salary,  and  out  of  this  is  supposed  to  pay 
for  his  own  personal  staff.  From  these  high  mag- 
nates downward,  the  Chinese  officials  are  under- 
paid in  the  same  proportion,  until  one  gets  to 
the  lowest  grade  —  the  petty  mandarins,  whose 
official  pay  is  scarcely  better  than  that  of  a  well- 
paid  Hong  Kong  coolie,  and  the  soldiers  and  sail- 
ors, who  receive  four  to  ten  shillings  a  month, 
subject  oftentimes  to  various  unjust  deductions 
and  squeezes  by  their  superiors. 

"  These  generalizations  will  show  your  Lordship 
that  such  underpaid  officials,  both  high  and  low, 
cannot  help  but  resort  to  a  regular  system  of  cor- 
ruption and  peculation,  and,  in  the  struggle  for 
official  existence,  honor  and  honesty  are  impossi- 
ble. The  more  fortunate  and  less  scrupulous 
among  them  amass  fabulous  wealth,  while  those 
endowed  with  a  little  more  conscience  have  to  be 

content  with  a  mere  competency,  and  the  upright 



mandarin,  if  such  has  an  existence,  is  forced  to  re- 
tire after  a  short  experimental  career.  From  this 
it  can  readily  be  seen  why  an  adequate  sum  of 
money  set  aside  by  the  Government  for  a  definite 
object  is  found  to  be  insufficient  at  the  end,  or 
why  a  sufficient  sum  of  money  having  been  ex- 
pended, no  satisfactory  results  can  be  obtained ;  or 
why  a  handsome  amount  having  been  paid  for 
superior  articles  of  modern  manufacture,  the  most 
inferior  and  antiquated  objects  are  bought  in  sub- 

"  In  short,  your  Lordship,  ask  any  independent 
Chinaman  you  meet  with,  and  he  will  tell  you  the 
same  story — namely,  that  when  a  sum  of  money 
passes  from  the  Imperial  Board  of  Revenue  suc- 
cessively through  the  various  channels  to  its  des- 
tination, like  a  well-known  musical  scale,  it  grad- 
ually diminishes  and  becomes  beautifully  less. 
With  such  a  system  in  vogue,  how  can  China  ex- 
pect any  reform?  All  the  mandarins  in  power 
would  naturally  oppose  any  measure  for  reform 
tending  to  take  away  their  illegitimate  though, 
under  the  circumstances,  quite  necessary  gains. 
How  can  she  expect  her  officials  to  refuse  bribery 
and  blackmail  when  proffered  to  them  by  friends 
or  foes  ?  How  can  she  expect  to  have  a  true  re- 
turn of  her  revenue,  and  recover  the  seven-tenths 
of  it  which  annually  goes  into  the  pockets  of  her 
officials  ?  How  can  she  hope  to  create  and  main- 
tain a  well-disciplined  army  and  an  adequate  navy 

when  the  necessary  funds  set  aside  for  these  pur- 



poses  are  liable  to  diminution  by  successive  pec- 
ulations and  illegal  deductions?  How  can  she 
inaugurate  and  accomplish  her  public  works,  such 
as  the  different  arsenals,  docks,  and  the  embank- 
ment of  the  rivers,  when  the  necessary  expendi- 
ture is  subject  to  the  same  unfavorable  influences? 
How  can  she  make  a  satisfactory  settlement  about 
her  likin  taxes  in  their  various  forms,  such  as  loti- 
shui,  cho-H,  etc.,  when  a  great  majority  of  her 
officials  look  to  these  sources  to  eke  out  their 
income  and  supplement  their  meagre  salaries? 
And,  finally,  how  can  she  proceed  with  her  rail- 
ways, open  her  mines,  promote  her  industries  and 
manufactures,  increase  her  commerce,  and  develop 
her  resources  generally,  when  every  official  in  her 
kingdom  is  bent  upon  making  money  out  of  the 
public  funds  and  revenue,  and  is  resorting  to  dis- 
honest practices  of  every  description  to  enrich 
himself  at  the  expense  of  the  State  and  its  humble 

"  With  the  reformation  of  this  unhappy  state  of 
officialdom  in  China,  it  will  be  possible  for  compe- 
tent and  honest  men  to  enter  her  service  and  to 
discharge,  honorably  and  well,  the  various  func- 
tions intrusted  to  them.  It  will  then  be  easy  for 
her  to  commence  public  improvements  with  some 
hope  of  success.  Now,  as  things  are,  the  largest 
purse  will  win  the  day,  either  in  the  civil,  military, 
or  political  arena;  and  such  a  condition  will  not 
suit,  in  our  humble  opinion,  the  honorable,  frank, 

and  straightforward  policy  of  Great  Britain,  where- 



as,  on  the  other  hand,  it  helps  the  less  scrupulous 
policy  of  rival  Powers,  Besides,  the  reformation 
in  this  particular  direction  will  receive  the  general 
approval  and  support  of  the  Chinese,  and,  we  vent- 
ure to  think,  of  the  Chinese  officials  themselves, 
most  of  whom  are  not  without  some  sense  of  rec- 
titude. With  this  reform  well  in  hand,  the  way 
would  be  clear  for  the  next.  All  opposition  from 
the  officials  and  their  underlings  having  been 
overcome  by  the  raising  of  their  salaries,  it  will  be 
easier  then  to  put  China's  revenues  in  order. 

"  The  revenue  system  of  China  is  notoriously 
bad.  The  total  revenue  received  into  the  Imperial 
Treasury  scarcely  represents  three-tenths  of  what 
is  levied  by  the  officials  throughout  the  country. 
A  detailed  analysis  of  the  financial  arrangements  of 
China  would  occupy  too  much  time  and  space,  but 
we  refer  your  Lordship  to  the  admirable  pam- 
phlet written  by  Consul-General  Jamieson  on  *  The 
Revenue  of  China,'  submitted  to  Parliament  in 
1897.  In  this  pamphlet  Mr.  Jamieson  has  not  ex- 
aggerated the  amount  actually  collected  by  China's 
officials.  Rather  has  he  under-estimated  the  total, 
and  yet  from  his  work  your  Lordship  will  learn 
that  the  revenue  of  China  should  at  least  be  from 
three  to  four  times  its  present  amount.  This  fear- 
ful peculation  by  the  Chinese  officials,  together 
with  the  evil  habit  of  the  Chinese  authorities  to 
*  farm '  out  some  of  the  sources  of  revenue  to  minor 
officials  or  regular  'farmers,'  renders  the  Chinese 

revenue  system  truly  a  formidable  obstacle  to  the 
p  225 


improvement  of  international  commerce,  the  in- 
crease of  local  trade  and  industry,  and  the  devel- 
opment of  all  her  natural  resources.  Unless  the 
financial  arrangements  are  first  reformed,  it  would 
be  useless  to  attempt  anything  for  the  improve- 
ment and  advancement  of  the  Chinese  Empire.  If 
China  could  be  persuaded  by  a  little  gentle  press- 
ure from  Great  Britain  to  place  the  collection  of 
her  inland  revenue,  crown  rents,  and  taxes,  in  the 
hands  of  a  competent  establishment,  somewhat 
after  the  fashion  of  the  Imperial  Maritime  Cus- 
toms, it  would  prove  the  salvation  of  China  as  a 

"  We  will  not  trouble  your  Lordship  with  the 
other  reforms  which  are  more  or  less  necessary  to 
China  in  her  present  condition,  such  as  the  train- 
ing of  an  efficient  army,  navy,  and  police,  the  open- 
ing of  technical  and  scientific  schools,  the  placing 
of  competent  and  properly  trained  men  in  charge 
of  her  Government  departments  requiring  special 
and  technical  knowledge,  the  opening  of  all  her 
internal  waterways  and  towns  to  trade,  the  speedy 
and  economical  construction  of  her  railways,  and 
the  opening  of  her  mines,  etc.  But  we  will  be 
content  by  addressing  you  in  regard  to  what  we 
consider  to  be  the  root  and  origin  of  all  her  politi- 
cal and  commercial  evils. 

"  To  sum  up,  we  would  strongly  urge  upon  your 
Lordship,  and  through  you  the  great  British  pub- 
lic, that  this  is  the  time  for  prompt  and  decisive 

action  in  China;  that  the  best  policy  for  Great 



Britain  and  China  alike  is  the  *  Open  Door '  policy 
as  understood  by  us  in  the  sense  as  above  de- 
scribed ;  that  this  policy,  good  and  sound  though 
it  be,  requires  careful  application  and  bold  deter- 
mination for  its  enforcement ;  that  previous  to,  or 
concurrent  with,  the  carrying  out  of  this  policy, 
the  reorganization  of  China's  fiscal  system  is  abso- 
lutely essential ;  that  Great  Britain,  either  alone  or 
along  with  other  Powers,  should  exercise  firmness 
in  getting  the  Chinese  Government  to  intrust  the 
collection  of  her  revenue  to  a  coUectorate  similar 
to  the  Imperial  Maritime  Customs;  that  before 
this  is  done  (or  simultaneously)  the  Chinese  offi- 
cials, both  high  and  low,  should  be  assured  of  ade- 
quate salaries  and  pensions  commensurate  with 
their  various  positions  in  the  Government  service; 
that  while  these  reforms  are  on  the  way  the  Brit- 
ish Government  should  assist  the  Chinese  authori- 
ties in  maintaining  order  within  her  territories; 
and  that  all  other  reforms  should  gradually  be  in- 
troduced hereafter  as  occasion  demands  or  permits. 

"  Before  we  close  this  letter,  we  would  respect- 
fully bring  before  your  Lordship  a  matter  of  some 
considerable  importance,  although  not  generally 
recognized.  We  refer  to  what  we  consider  to  be 
an  effective  means  for  the  extension  of  British  in- 
terests and  influence  among  the  Chinese  and  the 
promotion  of  British  commerce  throughout  the 
Empire  of  China. 

"  We  think  that  there  is  a  mighty  force  available 
for  the  British  Government,  a  force  which  has  been 



hitherto  lying  dormant  and  undeveloped  —  either 
willingly  neglected  or  perhaps  never  dreamed  of. 
That  force  is  the  unchallenged  commercial  acumen 
of  the  Chinese.  By  a  proper  system  of  organizar 
tion  and  greater  encouragement  to  British  subjects 
of  Chinese  parentage,  they  can  be  made  an  arm  of 
strength  to  Great  Britain  commercially,  and  that 
proud  position  which  she  has  held  in  China  can 
yet  be  maintained  despite  the  rivalry  and  under- 
hand schemes  of  her  enemies.  We  humbly  suggest 
that  Britain's  Chinese  subjects  be  sent  to  the  in- 
terior to  occupy  every  possible  source  of  trade  and 
to  act  as  commercial  scouts  or  living  channels  of 
communication  to  the  different  Chambers  of  Com- 
merce. Well  organized  and  instructed  to  make 
inquiries  within  their  tradal  spheres  or  to  penetrate 
further,  if  need  be,  into  the  interior  or  any  special 
region,  these  intelligent  merchants  may  perform 
wonders  and  help  to  maintain  the.  commercial 
supremacy  of  Great  Britain.  It  may  be  stated  as 
an  irrefutable  fact  that,  wherever  the  goods  may 
come  from,  whether  Britain,  Germany,  France, 
America,  or  Japan,  they  ultimately  reach  the  Chi- 
nese market  through  those  Chinese  merchants  who 
know  exactly  what  is  needed  and  the  best  mode  of 
supplying  the  people's  wants.  They  act  the  nec- 
essary part  of  middle-men  between  the  foreign  mer- 
chants and  the  large  mass  of  native  consumers. 
They  can  visit  places  where  Europeans  would  only 
arouse  suspicion ;   they   can  extract   information 

where  foreigners  would   only   close  the   natives' 



mouths.  Where  Chinese  of  the  interior  would 
willingly  interchange  views  with  British  subjects 
of  Chinese  parentage  and  Chinese  dress,  foreign- 
ers would  have  to  be  content  with  vague  and  eva- 
sive answers  given  grudgingly  and  with  circum- 

"  With  the  support  and  good-will  of  these  British 
subjects  of  Chinese  parentage,  with  the  removal  of 
the  likin  barrier  and  other  obnoxious  Customs' 
regulations,  British  goods,  assisted  by  superior 
carrying  powers,  can  supply  the  Chinese  market, 
and  there  would  be  such  a  ramification  of  British 
commercial  interests  in  the  whole  Chinese  Empire 
that  China,  in  its  entirety,  would  become  a  com- 
plete sphere  of  British  influence,  which,  as  Great 
Britain  is  a  nation  of  free-traders,  may  be  consid- 
ered as  synonymous  with  the  *Open  Door.'  We 
are  hopeful  of  seeing  the  day  when  Great  Britain 
will  emerge  from  this  commercial  and  political 
conflict  with  untarnished  lustre  and  unsullied 

"In  conclusion,  we  beg  to  offer  your  Lordship 
our  most  sincere  thanks  and  the  thanks  of  all  the 
enlightened  Chinese  for  the  personal  interest  and 
trouble  you  have  taken  in  the  Chinese  question ; 
for  your  lucid  enunciation  of  the  policy  of  the 
*  Open  Door,'  and  for  your  strong  support  of  the 
same,  which,  if  maintained,  would  not  only  be  bene- 
ficial to  Great  Britain  and  other  nations,  but  would 
confer  lasting  benefit  upon  China  herself;   and, 

lastly,  for  your  kind  reception  of  this  address,  im- 



perfect  as  it  is.  On  your  Lordship  we  place  our 
implicit  reliance,  knowing  as  we  do  that  you  will 
champion  the  cause  of  commercial  and  political 
freedom  and  liberty  with  the  most  distinguished 
ability  and  success. 

"  We  have  the  honor  to  be, 
"  Your  Lordship's  humble,  obedient  servants, 

"Ho  Kai, 
"M.B.,  CM.,  Aberdeen ;  M.R.C.S. 
England ;  Barrister-at-law,  Lin- 
coln's Inn;  Senior  Member  of 
Legislative  Council  representing 
the  Chinese. 

"  Weityuk,  J.P,, 
"Junior    Member    of    Legislative 
Council   representing    the    Chi- 
"Hong  Yj:^^^^  January  20,  1899." 

This  address  shows  the  deep  interest,  not  un- 
mixed with  anxiety,  with  which  the  great  Chinese 
trading  community  view  the  present  and  future 
condition  of  their  Empire.  There  are  many  points 
in  the  address  worthy  of  comment,  but  I  will  se- 
lect the  following: 

The  statement  with  regard  to  the  position  of 
those  Chinese  who  have  become  British  subjects 
is  not  generally  known,  and,  I  submit,  calls  for  the 
earnest  attention  of  the  Associated  Chambers.  It 
cannot  add  to  the  prestige  of  the  British  Empire, 

nor  can  it  improve  British  trade  and  commerce,  if 



this  state  of  affairs  is  allowed  to  continue.  There 
can  be  no  possible  reason  why  a  Chinese  who  be- 
comes a  British  subject  should  not  enjoy  all  the 
privileges  and  advantages  which  are  available  to 
any  other  British  national.  Why  should  a  China- 
man who  wishes  to  become  a  British  subject  be 
compelled  to  submit  to  what  he  considers  degrad- 
ing and  humiliating  regulations  a  bit  more  than 
those  other  nationalities  and  creeds  who  wear  the 
dress  of  their  people,  and  who  form  the  larger  pro- 
portion of  the  millions  who  are  proud  to  be  the 
subjects  of  the  Queen  of  England  ? 

The  Chinese  merchants  appear  to  think  that 
the  first  reform  necessary  is  to  pay  the  Chinese 
authorities  proper  salaries.  As  things  are  at  pres- 
ent, even  if  this  were  possible,  I  fear  the  squeezes 
and  corruptions  would  not  be  less.  The  idea  that 
a  reorganized  army  would  be  as  incompetent  and 
inefficient  as  the  present,  if  left  to  the  Chinese 
themselves,  I  entirely  agree  with,  but  if  organized 
by  foreign  officers  with  a  system  of  public  accounts, 
both  economy  and  efficiency  would  soon  take  the 
place  of  extravagance  and  decay.  No  reforms, 
such  as  a  proper  system  of  collecting  revenue  or 
a  better  system  of  administration,  can  possibly  be 
brought  about  in  a  country  so  hopelessly  corrupt 
as  China  until  the  first  and  initial  step  is  taken  of 
giving  authority  to  those  powers  which  only  an  ef- 
fective military  and  police  can  supply. 




The  estimated  population  is  1,600,424 


The  total  value  of  trade  in  1897  was  Hk.  Taels  49,934,391 
(over  ;^7, 1 00,000). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  3,718,064,  of  which  3,000,571  was  British. 

On  the  29th  of  December,  1898,  I  arrived  at 
Canton.  Canton  is  the  capital  of  the  province  of 
Kwangtung,  and  is  situated  on  the  Chu-kiang  or 
Pearl  River. 

At  a  meeting  of  the  British  merchants  at  Can- 
ton I  was  given  the  following  Memorandum  and 
asked  to  convey  it  to  the  Associated  Chambers. 
The  merchants  informed  me  that  the  development 
of  British  trade  and  commerce  in  this  port  would 
be  assured,  provided  that  the  disabilities  from 
which  that  trade  and  commerce  were  suffering 
were  removed. 

Their  Memorandum   is  very  clear  and  to  the 

point,  and  is  here  inserted : 



"Canton,  December  29,  1898. 
"  Rear- Admiral  Lord  Charles  Beresford,  C.B.: 

"  My  Lord, — You  have  been  good  enough  to 
express  a  wish  through  her  Majesty's  Consul  to 
receive  during  your  visit  here  the  views  of  British 
firms  trading  in  Canton  concerning  the  general 
course  of  trade,  and  of  any  disabilities,  etc.,  from 
which  British  trade  is  suffering. 

"  The  Chamber  of  Commerce  here  being  a 
cosmopolitan  body,  the  British  merchants  having 
their  headquarters  in  this  place,  the  agents  of 
British  firms  represented  in  Canton  have  con- 
ferred together,  and  are  agreed  to  impress  upon 
your  Lordship  the  desirability  of — 

"  I.  A  definition  of  the  area  of  the  Port.  The 
Treaty  Port  of  Canton  was  doubtless  in  the  origi- 
nal Treaty  intended  to  comprise  the  city  of  Can- 
ton and  its  suburbs,  including  the  suburbs  of 
Honan  and  Fa-Ti. 

"  However,  in  the  Chefoo  Convention  drawn  by 
Sir  Thomas  Wade,  in  Section  III.,  Clause  i,  was 
embodied  that,  subject  to  ratification  later, 

"*The  ground  rented  by  foreigners  (the  so- 
called  concessions)  at  the  different  ports  be 
regarded  as  the  area  of  exemption  from  likin,' 

although  by  the  additional  article  signed  in  Lon- 
don, 1 8th  July,  1885,  it  was  expressly  stipulated 
that  this  should  be  reserved  for  future  considera- 



**  The  introduction  of  this  point,  and  its  non- 
settlement,  have  greatly  restricted  the  rights  ac- 
corded to  British  subjects  by  the  Treaty  of  Tien- 

"  The  consumption  of  British  goods  would,  no 
doubt,  be  much  increased  if  British  merchants 
were  allowed  to  sell  same  in  the  city  of  Canton 
and  its  suburbs  without  likin  being  levied. 

"  Of  late  years  a  likin  boat  has  been  moored  op- 
posite the  Foreign  Customs  shed,  and  likin  has 
been  levied  on  all  goods  brought  there,  to  pay  the 
duties  regulated  by  Treaty. 

"  2.  Transit  Passes. — The  energetic  action  of 
H.M.'s  Minister,  and  of  the  Consuls  acting  on  the 
spot,  has  done  much  to  clear  away  the  obstruc- 
tions which  the  Chinese  provincial  authorities  have 
raised  to  the  free  transit  of  goods  under  these 

"  It  is  to  be  hoped  that  an  opportunity  may  pre- 
sent itself  of  pressing  for  an  open  transit  pass,  free- 
ing goods  to  any  point  in  the  two  provinces,  with- 
out declaration  of  destination. 

"  3.  Piracy. — The  last  few  months  piracy  on  the 
West  River  and  its  environs  has  been  rife,  and 
many  native  merchants  bringing  down  silk,  cassia, 
matting,  and  other  produce  from  the  different  dis- 
tricts to  Canton,  for  delivery  under  contract  to  for- 
eign merchants,  have  suffered  serious  loss  of  both 
property  and  life.  There  is  also  constant  delay  in 
carriage,  owing  to  native  craft  being  afraid  to 
travel  at  night  or  without  escort. 



"  It  would  be  well  1:0  impress  upon  the  Chinese 
Government  that  British  subjects,  and  those  em- 
ployed by  them,  should  be  protected  from  such 
losses  and  from  violence  of  this  sort. 

"4.  French  Sphere  of  Influence. — It  has  late- 
ly been  put  forward  in  certain  newspapers  and 
other  publications  that  the  French  Government 
have  come  to  regard  the  provinces  of  Kwangsi  and 
Kwangtung  as  already  marked  out,  under  certain 
eventualities,  as  a  sphere  of  French  influence.  We, 
the  British  merchants  in  Canton,  venture  to  pro- 
test most  strongly  against  such  an  assumption  be- 
ing admitted  by  our  Government. 

"  Broadly  speaking,  the  foreign  trade  of  these 
two  provinces  has  been  composed  principally  of 
British  goods  for  many  years,  combined  with  a 
good  percentage  of  German  and  American  goods. 

"  As  regards  the  exports,  which  are  principally — 

"  Raw  silk,  waste  silk,  tea,  cassia,  essential  oils 
of  aniseed  and  cassia,  matting,  canes,  etc.,  it  may 
be  interesting  to  your  Lordship  to  know,  approxi- 
mately, to  what  a  small  extent  France  has  partici- 
pated in  this  trade  in  some  of  the  principal  exports 
given  in  tables  attached. 

"  We  can  only  consider  that  the  claim  made  by 
the  French  in  some  quarters  to  the  bulk  of  the  silk 
trade  is  based  on  the  fact  that  the  silk  is  principal- 
ly exported  to  Lyons,  but  the  trade  is  not,  as  is 
shown,  in  French  hands. 

"  It  will  be  seen  that,  if  the  statement  of  French 
influence  is  allowed  by  H.M.'s  Government  to  pass 



without  vigorous  protest,  the  whole  of  a  most  im- 
portant export  trade,  and  a  valuable  outlet  for  im- 
ports, might  eventually  come  under  French  in- 
fluence, when  the  trade  itself  is  principally  in  the 
hands  of  British  merchants.  The  pretensions  of 
the  French  Government  have  no  support  given  to 
them,  either  by  the  importance  of  their  trade,  which 
is  very  small,  or  by  the  number  of  nationals  en- 
gaged in  it. 

"5.  Preferential  Duties. — Attention  should 
be  drawn  to  the  fact  that  British-owned  steamersf 
have  not  been  able  to  obtain  their  fair  share  of  the 
carrying  trade  in  this  and  the  West  River,  owing 
to  the  preferential  duties  accorded  by  the  native 
authorities  to  native  bottoms,  and  it  is  probable 
that  a  successful  carrying  trade,  on  the  newly 
opened  West  River,  will  not  be  possible  until  the 
duties  are  equalized. 

"  We  have  the  honor  to  be,  my  Lord, 

"  With  the  highest  respect, 
"  Your  Lordship's 

"  Most  obedient  humble  servants, 

"  DUNDONALD  &  Co. 

"  RowE  &  Co. 

"  Herbert  Wemys. 

"  T.  E.  Griffith. 

"  Reiss  &  Co.,  per  Fredk.  Jalings. 

"  Jardine,  Matheson  &  Co.,  per  F.  J.  Schiirch. 

"  Shewan,  Tomes  &  Co.,  per  E.  M.  Smith,  Jr. 

"  P.  pro  BuTTERFiELD  &  SwiRE,  J.  R.  Grcavcs." 



It  appears  extraordinary  that  so  simple  a  ques- 
tion as  a  proper  definition  of  the  area  of  the  port 
cannot  be  settled. 

The  question  has  always  been  an  open  one  from 
the  early  days  of  the  original  Treaty  of  Nanking, 
and  since  the  year  1885  it  has  been  under  con- 
sideration. As  it  is  a  matter  which  so  directly  and 
intimately  afifects  the  conditions  of  British  trade, 
it  would  appear  that  enough  time  has  been  given 
for  consideration  and  that  something  definite 
should  be  decided  upon. 

Being  satisfied  that  the  Associated  Chambers 
would  wish  for  full  particulars  on  this  question,  I 
applied  to  the  British  Consul  for  information,  and 
got  a  copy  of  some  interesting  documents,  which 
I  here  insert.  They  show  how  far  this  matter  had 
proceeded  at  the  time  when  I  left  Canton.  It  will 
be  observed  that  his  Excellency  the  Viceroy  is  still 
anxious  for  further  consideration  on  this  all-im- 
portant matter,  although  fourteen  years  have  al- 
ready been  expended  in  this  indefinite  manner. 
Perhaps  the  publicity  given  to  the  question  in 
this  Report  may  hurry  on  the  settlement  of  a 
point  so  essential  to  the  development  of  Anglo- 
Saxon  trade. 

Under  the  existing  Chinese  regulations  there  is 
not  a  single  foreign  store  or  shop  allowed  in  the 
city  of  Canton.  The  following  is  an  explanation 
of  an  attempt  on  the  part  of  the  British  Consul  to 
test  a  case  with  regard  to  our  treaty  rights : 



From  H.  B.  M.  Minister  at  Peking  to  Consul. 

"  Peking,  August  lo,  1898. 

"  Sir, — It  is  scarcely  necessary  for  me  to  inform 
you,  in  reply  to  your  despatch  No.  24  of  June  21st, 
that  Messrs.  Banker  &  Co.  are  clearly  entitled 
under  treaty  to  establish  a  shop  in  the  city  of 
Canton,  and  in  carrying  on  the  business  of  such  a 
shop,  to  exemption  from  all  duties  and  exactions 
that  are  not  authorized  by  treaty.  As  foreign 
goods  imported  into  Canton  are  free,  so  long  as 
they  remain  within  the  limits  of  the  port,  from  all 
taxation  except  the  tariff  duty,  Messrs.  Banker  & 
Co,  should  resist  any  attempt  on  the  part  of  the 
Chinese  authorities  to  levy  likin  on  such  goods 
within  the  Chinese  city. 

"  If  likin  is  levied  in  contravention  of  the  treaty, 
or  if  Messrs.  Banker  &  Co.'s  business  is  interfered 
with,  it  will  become  your  duty  to  give  them  every 
lawful  assistance  and  to  exercise  the  utmost  vigil- 
ance in  defence  of  treaty  privileges.    I  am,  etc., 

(Signed)    "Claude  M.  Mac  Donald. 
"  R.  W.  Mansfield,  Esq.,  H.M.  Consul,  Canton." 

From  Consul  to  Viceroy. 

"  H.B.M.  Consulate, 

"Canton,  December  12,  1898. 

"  Your  Excellency, — The  Treaty  of  Nanking 

in  Articles  II.  and  X.  opens  the  city  of  Canton  to 



foreign  trade,  and  provides  that  foreign  goods  shall 
pay  to  the  Imperial  Maritime  Customs  import  duty 
which  shall  free  them  in  the  port,  whence  they 
may  be  conveyed  into  the  interior  on  payment  of 
transit  dues. 

"  The  British  firm  of  Banker  &  Co.  has  now 
petitioned  that  they  have  opened  a  shop  in  the 
city  for  the  sale  of  piece-goods,  and  I  have  now 
the  honor  to  request  that  your  Excellency  will 
issue  instructions  to  your  subordinates  that  the 
goods  of  Messrs.  Banker  &  Co.  are  not  to  be  in 
any  way  molested  on  their  way  from  the  steamer 
wharves  to  their  city  shop ;  nor  can  any  duty  be- 
yond the  Customs  import  duty  be  levied  on  these 
goods  so  long  as  they  are  in  the  port  or  city  of 
Canton,  whether  while  in  the  hands  of  Banker  & 
Co.  or  of  those  who  purchase  goods  of  them. 

"  I  have  received  special  instructions  from  H.M. 
Minister  on  this  subject,  and  should  any  of  the 
officials  under  your  jurisdiction  disregard  treaty 
rights  and  unlawfully  detain  or  seek  to  levy  likin 
or  other  charges  on  these  goods,  such  officials  will 
assuredly  be  held  responsible  for  all  loss  or  injury 
to  business  which  the .  British  merchant  may  sus- 
tain thereby. 

"  I  have,  etc., 

(Sd.)    "  R.  W.  Mansfield, 

"  H.B.M.  Consul. 

"To  H.E.  Tan, 

"  Viceroy  of  the  Two  Kwang  Provinces." 



Viceroy  Tan  to  Consul  Mansfield. 

"  KuANG  Hsu,  247.,  iim.,  4d., 

"  December  1 6,  1 898. 

"  Sir, — I  have  the  honor  to  acknowledge  receipt 
of  your  despatch  of  the  12th  inst.,  informing  me 
that  Banker  &  Co.  had  opened  a  shop  in  the  city 
for  the  sale  of  piece-goods,  and  requesting  me  to 
instruct  my  subordinates  to  the  efifect  that  Banker 
&  Co.'s  goods  are  not  to  be  in  any  way  molested  on 
their  way  from  the  steamer  wharf  to  the  city  shop, 
nor  can  any  duty  be  levied  on  them  so  long  as 
they  are  in  the  city  or  port  of  Canton,  whether 
while  in  the  hands  of  Banker.  &  Co.,  or  of  those 
who  purchase  goods  from  them. 

"  In  reply  I  have  to  state  that  the  3d  section  of 
the  Chefoo  Convention  provides  as  follows : 

"  *  With  reference  to  the  area  within  which,  ac- 
cording to  the  treaties  in  force,  likin  ought  not  to 
be  collected  on  foreign  goods  at  the  open  ports. 
Sir  Thomas  Wade  agrees  to  move  his  Govern- 
ment to  allow  the  foreign  concessions  at  the  dif- 
ferent ports  to  be  regarded  as  the  area  of  exemp- 
tion from  likin ;  and  the  Government  of  China 
will  thereupon  allow  Ichang  in  the  province  of 
Hupei,  Wuhu  in  Anhui,  Wenchow  in  Chekiang, 
and  Pakhoi  in  Kwangtung,  to  be  added  to  the 
number  of  ports  open  to  trade.' 

"  A  consideration  of  the  meaning  of  the  wording 

of  the  above  shows  that,  as  in  former  treaties,  there 



was  no  express  provision  with  regard  to  the  area 
within  which  foreign  goods  are  exempt  from  likin, 
therefore  Sir  Thomas  Wade  agreed  to  move  his 
Government  to  agree  to  regard  the  concessions  at 
the  various  ports  as  the  areas  of  exemption  from 
likin,  and  in  return  China  added  four  more  treaty 
ports  to  the  existing  number;  thus  the  exemption 
from  likin  only  obtains  within  the  concessions,  and 
does  not  obtain  without  them.  With  regard  to 
this  point  there  is  not  the  slightest  doubt. 

"  In  the  present  instance,  the  action  of  the  Brit- 
ish merchant,  Banker,  in  opening  a  place  of  busi- 
ness in  the  city,  is  clearly  not  permissible  accord- 
ing to  treaty,  and  I  must  therefore  request  you  to 
at  once  direct  him  to  forthwith  either  close  or 
remove  his  shop,  so  that  complications  may  be 
avoided.     This  is  of  the  utmost  importance. 

"  I  have,"  etc., 

(Seal  of  Viceroy.) 

Consul  Mansfield  to  Viceroy  Tan. 

"H.B.M.  Consulate, 
"Canton,  December  19,  1898. 
"  Your  Excellency, — I  have  the  honor  to  ac- 
knowledge your  Excellency's  despatch  of  the  i6th 
inst.,  to  the  effect  that  the  action  of  Banker  &  Co., 
in  opening  a  place  of  business  within  the  city,  is 
clearly  not  permissible  according  to  treaty. 

Q  241 


"Your  Excellency  refers  to  Section  III.  of  the 
Chefoo  Convention,  but  you  do  not  appear  to  be 
aware  that  an  additional  article  to  that  Convention 
was  signed  on  July  i8,  1885,  in  which  it  is  ex- 
pressly stated  that  the  section  your  Excellency 
quotes  requires  further  consideration,  and  shall  be 
reserved  for  further  consideration  between  the  two 
Governments.  Until  such  further  consideration, 
therefore,  the  Treaties  of  Nanking  and  Tientsin, 
which  declare  the  city  and  port  of  Canton  open 
to  foreign  trade,  must  be  carried  out  in  their  in- 

"  I  had  already,  before  I  wrote  to  your  Excel- 
lency, referred  the  matter  to  H.H.  Minister  at 
Peking,  and  his  reply  was  as  follows  : 

"  *  Banker  &  Co.  are  clearly  entitled,  under 
treaty,  to  establish  a  shop  in  the  city  of  Can- 
ton, and,  in  carrying  on  the  business  of  such 
a  shop,  to  exemption  from  all  duties  and  exac- 
tions that  are  not  authorized  by  treaty.  As 
foreign  goods  imported  into  Canton  are  free, 
so  long  as  they  remain  within  the  limits  of 
the  port,  from  all  taxation  except  the  tariff 
duty,  Banker  &  Co.  should  resist  any  attempt 
to  levy  likin  on  such  goods  within  the  port. 

"  *  If  likin  is  levied  in  contravention  of  the 
treaty,  or  if  Banker  &  Co.'s  business  is  inter- 
fered with,  it  will  be  your  duty  to  give  them 
every  assistance,  and  to  exercise  the  utmost 

vigilance  in  defence  of  treaty  privileges.' 



"  Such  being  my  instructions,  I  am  obliged  most 
respectfully  to  inform  your  Excellency  that  I  have 
communicated  them  to  Banker  &  Co.,  and  that 
any  attempt  to  levy  likin  on  his  goods,  or  to  in- 
terfere with  his  business,  will  oblige  me  to  institute 
claims  against  any  Chinese  official  who  may  make 
such  an  attempt. 

"  I  have,  etc., 

(Sd.)    "  R.  W.  Mansfield." 

From  Consul  to  Banker  &  Co. 

"  H.B.M.  Consulate, 
"  Canton,  December  21,1 898. 

"Sirs, — The  Viceroy  having  replied,  raising 
objections  to  your  opening  a  shop  in  the  city,  I 
have  again  written  to  him  that  you  are  within 
treaty  rights,  and  that  I  am  so  instructed  by  H.M.'s 

"  You  are  therefore  at  liberty  to  open  your  busi- 
ness as  soon  as  you  please.  The  business  must 
be  conducted  in  a  perfectly  bona  fide  manner,  and 
must  be  confined  to  your  own  firm,  and  not  be  on 
behalf  of  Chinese  unconnected  with  it,  that  there 
may  be  no  ground  for  complaint.  As  long  as  this 
is  the  case  you  may  rely  upon  me  to  protect  your 
treaty  rights,  which  are  that  the  goods  dealt  in  by 
you  are  free  from  all  taxation  between  the  steamer 
and  your  shop,  and  also  when  they  have  passed 
into  the  hands  of  your  customers,  so  long  as  they 



remain  within  the  city  of  Canton.  You  can  give 
a  guarantee  to  your  customers  that  you  will  meet 
all  claims  for  taxation,  and  you  will  at  once  report 
to  me  any  attempt  to  seize  or  levy  likin  on  them  in 
the  area  I  have  named.  I  presume  the  authorities 
have  the  right  to  examine  the  goods,  if  they  so 
desire,  on  the  way  to  your  shop,  to  prevent  smug- 
gling of  opium  or  contraband,  but  should  this  be 
done  in  a  wilfully  vexatious  manner,  you  will  report 
to  me. 

"I  am,  etc., 

(Sd.)     "  R.  W.  Mansfield. 
"  Messrs.  Banker  &  Co., 
"  Hong  Kong." 

Viceroy  Tan  to  Consul  Mansfield. 

"  KuANG  Hsu,  24y.,  iim.,  iid., 

''''December  23,  1898. 

"  Sir, — I  have  the  honor  to  acknowledge  receipt 
of  your  despatch  of  the  19th  inst."  (quoted  at 
length)  "  with  regard  to  the  question  of  the  estab- 
lishment of  foreign  places  of  business  within  the 

"  I  find  that  the  additional  article  to  the  Che- 

foo  Convention  contains  the  following  provision : 

*  As  regards  the  arrangements  proposed  in  Clauses 

I  and  2  of  Section  HI.  of  the  Chefoo  Agreement, 

it  is  agreed  that  they  shall  be  reserved  for  further 

consideration  between  the  two  Governments.' 



"  Thus  the  additional  article  only  provides  that 
the  arrangements  shall  form  the  subject  of  further 
consideration.  It  says  nothing  about  making  the 
original  Chefoo  Agreement  null  and  void,  nor  does 
it  provide  that,  until  the  arrangements  shall  have 
been  finally  decided  on,  action  shall  continue  to 
be  taken  in  accordance  with  the  Treaty  of  Nan- 
king. Therefore  it  naturally  follows  that  the  orig- 
inal Chefoo  Agreement  cannot  be  wiped  out. 

"  Furthermore,  ten  years  and  more  have  elapsed 
since  the  additional  article  was  agreed  to  between 
the  British  Government  and  the  former  Minister, 
H.E.  Tseng,  and  I  have  not  heard  of  foreign  mer- 
chants opening  places  of  business  in  the  native 
cities  at  the  various  treaty  ports,  which  is  a  clear 
proof  that  the  original  Chefoo  Agreement  still 
holds  good  as  of  yore. 

"  In  the  present  instance,  as  our  respective  Gov- 
ernments have  not  yet  come  to  a  definite  under- 
standing, I  cannot  consent  to  the  establishment  of 
places  of  business  by  foreign  merchants  outside 
the  concession. 

"  I  have  a  further  observation  to  make.  As 
concessions  have  been  established,  it  follows  that 
the  correct  procedure  is  for  the  foreign  merchants 
to  reside  and  transact  their  business  within  the 
concessions.  This  facilitates  their  being  com- 
pletely protected,  and  Chinese  and  foreigners  can 
secure  the  blessing  of  mutual  peace. 

"  Were  the  foreigners  to  live  among  the  natives 
one  could  never  be  certain  that  some  trifling  cause 



might  not  lead  to  a  serious  quarrel.  In  the  inter- 
ests of  a  lasting  friendship  between  our  countries, 
I  feel  it  to  be  my  duty  to  discuss  the  question 

"  I  have  the  honor  to  request  you,  with  a  view 
to  the  avoidance  of  further  complications,  to  direct 
Banker  &  Co.,  for  the  time  being,  either  to  remove 
or  close  the  shop  which  they  have  opened  in  the 
city,  and  to  defer  further  action  until  our  Gov- 
ernments shall  have  decided  upon  a  mode  of  pro- 

"  I  have  long  been  familiar  with  your  Minister's, 
Sir  Claude  Mac  Donald,  reputation  for  mildness 
and  uprightness,  and  I  am  sure  that  his  views  will 
coincide  with  mine,  so  I  hope  that  you  will  kindly 
communicate  my  views  to  him. 

"  I  have,"  etc. 

(Seal  of  Viceroy.) 

From  Consul  to  Viceroy. 

"  H.B.M,  Consulate, 
"  Canton,  December  29,  1898. 

"  Your  Excellency, — I  have  the  honor  to  ac- 
knowledge your  Excellency's  despatch  of  the  23d 
instant,  with  regard  to  the  question  of  the  establish- 
ment of  foreign  places  of  business  within  the  city. 

"  I  have  the  honor  to  observe  that  from  the  mo- 
ment that  it  was  decided  between  our  respective 
Governments  that  Clauses  i  and  2  of  Section  III. 

of  the  Chefoo  Agreement  required  further  consid- 



eration,  the  question  treated  by  these  clauses  had 
to  remain  as  it  was  before  the  Chefoo  Agreement 
was  drawn  up^that  is,  on  the  lines  of  the  Nan- 
king and  Tientsin  Treaties. 

"  As  I  have  already  observed  to  your  Excellen- 
cy, I  applied  to  her  Majesty's  Minister  for  instruc- 
tions before  taking  any  action  in  Banker  &  Co.'s 
case.  His  instructions  to  me,  which  I  have  had 
the  honor  to  quote,  are  explicit,  and  your  Excel- 
lency knows  that  it  is  the  duty  of  a  subordinate 
to  carry  out  the  instructions  of  his  superior. 

"  I  trust  that  your  Excellency  will  not  therefore 
deem  it  an  unfriendly  act  on  my  part  if  I  say  that 
I  am  unable  to  comply  with  your  request,  and  that 
I  have  instructed  Banker  to  open  his  shop,  and  act 
in  accordance  with  the  provisions  of  the  former 
treaties.  I  would,  on  my  side,  ask  your  Excellency 
to  give  instructions  that  his  business  be  not  inter- 
fered with.  If,  when  our  respective  Governments 
have  further  considered  the  question,  it  is  agreed 
that  the  terms  of  Clauses  i  and  2  of  Section  III. 
of  the  Chefoo  Convention  should  come  into  force, 
it  will  then  be  for  me  to  inform  Banker  &  Co. 
that  their  goods,  while  outside  the  British  conces- 
sion but  within  the  port  of  Canton,  are  liable  to 
payment  of  likin. 

"  I  have  the  honor  to  be, 
"  Your  Excellency's  most  obedient  humble  servant, 
(Signed)     "  R.  W.  Mansfield,  Consul. 

"  His  Excellency  Tan, 

"  Viceroy  of  the  Two  Kwang  Provinces." 


-^  I 


The  British  Minister  declares  in  clear  and  em- 
phatic language  that  under  Treaty  there  is  a  right 
to  establish  a  shop  in  the  city  of  Canton. 

The  Viceroy  declares  that  under  Treaty  this 
.  right  does  not  exist. 

At  Wuchow,some  lOO  miles  up  the  West  River, 
there  are  foreign  shops  in  the  town  and  suburbs 
because  the  whole  place  is  considered  an  open 
port,  there  being  no  settlement  or  concession; 
whereas  at  Canton,  where  there  are  foreign  con- 
cessions, only  the  area  of  such  concessions  counts 
as  the  open  port,  and  immediately  outside  their 
limits  likin  is  levied. 

The  merchants  here  were  much  exercised  in 
their  minds  at  the  frequent  piracies  which  had  oc- 
curred lately  on  and  about  the  West  River. 

I  obtained  from  the  British  Consul  and  other 
sources  full  accounts  of  the  piracies  which  actu- 
ally occurred  at  and  about  the  time  I  was  in  Can- 
ton. The  accounts  speak  for  themselves  as  to 
the  audacity  of  these  pests  to  trade  and  com- 
merce. The  merchants  told  me  that  at  the  pres- 
ent time  piracy  is  worse  than  it  has  ever  been 
known  before  in  this  locality,  and  is  enormously 
on  the  increase  in  the  district  round  Canton. 
Forty-one  instances  became  public  last  year,  but 
many  more  cases  occur  which  never  become 
known,  owing  to  the  terror  native  boatmen  have 
of  the  pirate's  revenge.  It  is  causing  immense 
delay   in  the   delivery   of  goods,  as   Chinese   in 

charge  of  cargo-boats  will  not  travel  at  night. 




"  Piracy  on  the  *  Tung  Kong  '  Launch,  Flying 
THE  British  Flag  at  Kong  Mun  on  the 
West  River  —  Consul's  Letter  to  his 
Excellency  the  Viceroy. 

"Your  Excellency, — I  have  received  the  iol- 
lowing  petition  from  the  Kwong-wan  Steamboat 
Company  of  Hong  Kong: 

"On  the  31st  October,  at  about  7.10  p.m.,  the 
steam-launch  Tung  Kongy  flying  the  British  flag, 
and  the  property  of  the  Kwong-wan  Steamboat 
Co.,  Limited,  was  at  Kong  Mun  in  the  San  Ui 
district  on  the  point  of  returning  to  Hong  Kong. 
As  the  anchor  was  being  weighed  a  number  of 
Chinese,  who  had  boarded  the  launch  at  Kong 
Mun  ostensibly  as  passengers,  terrified  the  master 
and  crew  by  pointing  fire-arms  at  them,  and  com- 
pelled them  to  take  the  launch  to  a  place  near  the 
Ma  On  Shan,  which  is  situate  near  a  stream  called 
Ma  Kau,  which  is  the  boundary  dividing  Kao 
Tsun  and  Hai  Chou,  and  also  the  district  of  Hsin 
Hui,  from  the  district  of  Shun  Te. 

"  When  the  Tung  Kong  had  arrived  inside  the 
Ma  Kau,  three  snake  -  boats  came  alongside,  and 
from  these  about  fifteen  more  pirates  boarded  the 
launch,  making  in  all  about  thirty  pirates  on  board 
at  that  time.  The  pirates  then  robbed  the  pas- 
sengers of  baggage,  goods,  and  effects  to  the  value 
of  about  $3000,  and  these  things  they  transferred 

to  a  large  cargo -boat  of  a  kind  similar  to  those 



seen  at  Kong-moon,  and  which  was  estimated  to 
be  between  two  and  three  hundred  piculs  in  carry- 
ing  capacity.  On  board  this  cargo-boat  there  ap- 
peared some  fifteen  more  pirates,  who  assisted 
those  on  board  the  launch  in  transferring  their 
booty ;  and,  after  the  stolen  goods  had  been  put 
on  board,  the  pirates  compelled  those  in  charge  of 
the  launch  to  tow  the  cargo-boat  until  about  1 1  p.m., 
at  which  time  the  launch  was  allowed  to  return. 
In  addition  to  stealing  the  articles  above  men- 
tioned, the  pirates  also  took  two  revolvers,  four 
rifles,  and  about  four  hundred  cartridges,  the  prop- 
erty of  the  Kwong-wan  Steamboat  Co.,  and  about 
$200  from  the  compradore's  room.  The  Com- 
pany also  fears  that  the  pirates  intend  to  attempt 
to  extort  money  from  the  owners  of  the  launch, 
for  at  the  time  of  the  piracy  one  of  them  said: 
*  We  know  that  the  owners  of  this  launch  are  mak- 
ing money,  and  when  we  send  them  a  letter  they 
had  better  obey  it.' 

"  It  is  believed  that  Ko  Chun  and  Hoi  Chou  are 
the  resort  of  a  large  and  desperate  band  of  robbers, 
and  I  have  to  request  that  your  Excellency  will 
take  vigorous  steps  to  root  them  out.  I  have 
the  honor  to  observe  that  during  the  past  few 
years  piracy  and  robbery  by  violence  have  in- 
creased to  a  very  great  extent  in  the  Kwangtung 
waterways.  Scarcely  a  day  passes  but  some 
flagrant  case  of  the  kind  occurs,  and  trade  is 
thereby  most  seriously  affected.     It  is  difficult  to 

avoid  the  conclusion  that  the  local  authorities  are 



negligent  of  their  duties.  In  the  present  instance 
a  vessel  bearing  the  British  flag  has  been  taken 
possession  of,  its  captain  and  crew  threatened  with 
fire-arms,  and  some  thousands  of  dollars'  worth  of 
property  robbed  Cases  of  this  kind  in  the  terri- 
tory  of  a  friendly  Power  cannot  but  be  detrimental 
to  cordial  relations,  and  I  feel  it  my  duty  to  report 
the  present  state  of  things  to  my  Minister. 

"  If  the  magistrates  of  districts  allow  robbers  to 
collect  in  bands  of  many  tens  and  commit  depreda- 
tions with  impunity,  they  are  unfit  for  their  position 
and  should  be  removed. 

"  I  feel  sure  that  your  Excellency,  who  cannot  be 
ignorant  of  what  is  going  on,  will  agree  with  me  in 
this,  and  that  you  will  lose  no  time  in  instituting  a 
vigorous  campaign  against  the  organized  piracy 
and  robbery  which  are  now  constantly  occurring. 
"  I  have,  etc., 

(Sd.)    "  R.  W.  Mansfield,  Consul. 

"  To  H.E.  Tan, 

"  Viceroy  of  the  Two  Kwang  Provinces." 

Piracy  on  the  Kwangtung  Waterways. 

Report  to  Minister. 

"  H.M.  Consulate, 

"Canton,  November  7,  1898. 

"  Sir, — Consul  Brenan,  in  his  Trade  Report  for 

1897  O^st  paragraph),  says:  *  Probably  never  since 

Canton  was  open  to  foreign  trade  has  piracy  been 



so  rife  as  in  the  year  under  review.  The  boldness 
of  the  pirates  is,  however,  surpassed  by  the  apathy 
of  the  provincial  Government'  Since  Mr.  Brenan 
wrote  this,  matters  have  been  going  from  bad  to 
worse.  From  December  last  to  date  no  less  than 
^^jr  cases  of  piracy  have  been  brought  to  the  notice 
of  this  office  by  the  Hong  Kong  Government,  and 
another  case  has  also  come  up  where  an  English- 
woman, married  to  a  Chinese,  was  one  of  the  suf- 
ferers. These  cases,  however,  form  but  a  very  small 
proportion  of  the  cases  that  have  actually  occurred. 
I  have  found  no  less  than  forty-one  cases,  accounts 
of  which  have  been  given  by  the  local  press.  In 
only  one  case  of  those  brought  to  my  notice,  in  spite 
of  continual  pressure,  has  any  arrest  been  made; 
and  matters  have  now  reached  such  a  pass  that 
trade  on  the  inland  waters  of  the  province  is  being 
very  seriously  interfered  with. 

"  I  have  the  honor  to  enclose  copy  and  trans- 
lation of  my  despatch  to  the  Viceroy  on  the  sub- 
ject of  the  first  case,  where  a  launch  plying  between 
Hong  Kong  and  Samshui  under  the  British  flag 
was  taken  possession  of  and  looted  by  a  gang  of 
some  forty-five  persons. 

"Finding  that  my  representations  on  the  sub- 
ject generally,  both  verbal  and  in  writing,  are  of 
no  avail,  I  find  myself  obliged  to  bring  the  matter 
to  your  notice.  The  persons  engaged  in  piracy 
and  robbery  by  violence  (for  the  offences  are  by  no 
means  confined  to  the  waterways)  must  be  very 

numerous,  and  these  being  emboldened  by  impu- 



nity,  the  evil  cannot  but  increase  unless  some 
means  can  be  found  for  dealing  effectually  with  it. 
In  my  opinion,  the  best  plan  would  be  the  special 
appointment  of  a  military  officer,  with  an  adequate 
force,  who  could,  in  each  case  reported,  be  de- 
spatched at  once  to  the  scene  of  the  piracy  and 
devote  all  his  energies  to  the  discovery  and  punish- 
ment of  the  offenders.  At  the  same  time,  to  se- 
cure for  him  the  energetic  support  of  the  District 
Magistrates,  these  officers,  who  are  the  responsible 
persons,  should  be  held  pecuniarily  liable  for  the 
property  robbed  in  their  districts.  In  the  present 
state  of  things,  no  less  radical  measures  would  be 
effective  to  put  a  stop  to  these  outrages,  which  are 
having  a  most  serious  effect  upon  trade  in  Kwang- 

"  The  case  reported  is  a  typical  one,  and  repre- 
sents  the  mode  of  procedure  in  almost  every  case. 
Actual  bloodshed  is  rare,  and  it  is  believed  that 
the  crews  of  the  pirated  vessels  are  frequently  in 
collusion  with  the  pirates. 

"  I  have,  etc., 

(Sd.)    "  R.  W.  Mansfield, 

"  H.B.M.  Consul. 

"  Her  Majestv's  Minister,  Peking." 


Piracy  at  Pinghai,  N.E.  of  Hong  Kong.     Hong 
Kong  Licensed  Junk  No.  5669. 

Copy  of  Statement  made  by  Lo  Tak-fat,  relative 
to  a  Piracy  committed  on  the  Hong  Kong  Li- 
censed Junk  No.  5669. 

Lo  Tak-fat  states : 

"  I  am  master  and  one-third  owner  of  the  li- 
censed fishing-junk  No.  5669;  my  two  partners 
are  also  on  board.  On  December  9,  1898,  we  sailed 
from  Hunghom,  bound  to  Kit  Shek  Chun ;  on  De- 
cember loth,  while  sailing  near  Ping  Hoi,  Kwai 
Sin  district,  about  fifty  miles  from  Hong  Kong, 
we  were  attacked  by  two  unlicensed  fishing-boats, 
one  about  eighty  piculs  capacity,  with  a  crew  of 
ten  to  twelve  men,  and  the  other  of  about  sixty 
piculs  capacity,  with  a  crew  of  about  eight  men. 
They  started  firing  with  muskets  at  us  from  a  dis- 
tance of  about  eighty  yards  off,  on  our  starboard 
side,  four  or  five  men  in  each  boat  firing,  and  the 
others  rowing.  As  they  neared  us  we  got  a  quan- 
tity of  ballast-stones  up  from  the  hold  to  repel 
them  with,  having  no  arms  or  ammunition  of  any 
kind  on  the  junk ;  when  close  alongside  they 
threw  a  number  of  powder-bags,  that  exploded  on 
board,  then  came  on  board  themselves,  shooting 
and  cutting  with  choppers  and  spears  all  who  op- 
posed them.  Two  of  my  folks  were  killed  by 
'  musket-balls,  three  were  cut  down  with  choppers 

and  tumbled  overboard,  and  four  were  wounded, 



one  by  a  musket-ball  in  his  arm,  and  the  other 
three  with  cuts  and  stabs  with  choppers  and  spears. 
The  rest  of  us  hid  under  the  hatches,  where  we 
were  not  further  molested.  The  pirates  ransacked 
the  junk,  broke  open  all  the  clothes -boxes,  and 
took  away  all  clothing  of  value,  one  small  clock, 
some  jewelry,  two  clothes  -  boxes,  and  over  icx) 
dollars  in  money  that  was  in  the  several  boxes; 
clothing,  money,  and  everything  will  amount  to 
over  2CX)  dollars.  I  had  a  good  sight  of  their  faces 
as  they  came  up,  and  would  be  able  to  identify 
many  of  them;  two  or  three  are  men  of  about 
fifty  years  of  age,  the  other  men  from  twenty  to 
forty  years  old ;  one  man  has  a  very  thin  yellow 
face,  and  no  teeth  in  front ;  he  is  about  twenty- 
seven  years  of  age.  Most  of  them  are  opium- 
smokers.  I  saw  no  fishing-gear  in  their  boats; 
the  boats  are  fishing-boats.  I  think  by  their  build 
they  are  craft  from  the  village  of  Ngau  Tau,  near 
Ping  Hoi.  After  they  left  I  turned  my  junk,  and 
looked  for  my  folks  who  were  thrown  into  the 
water.  I  saw  no  trace  of  them,  and  I  think  that, 
if  not  killed  outright  before  being  knocked  over- 
board, they  sank  and  were  drowned. 

"  I  then  sailed  back  to  Hong  Kong,  arriving  at 
Hunghom  about  8  p.m.  on  that  date,  where  I  made 
this  report  to  the  police,  December  lo,  1898." 




"  HuNGHOM  Police  Station, 

^^  December  12,  1898. 

"Sir, — I  have  the  honor  to  report  for  your  in- 
formation, with  reference  to  the  attached  report  of 
piracy : 

"  That  on  the  loth  inst.,  at  9.20  p.m.,  Lo  Tak-fat, 
master  of  fishing -junk  No.  5669  H,  reported  to 
me,  at  this  station,  that  his  junk  had  been  pirated 
in  Chinese  waters,  and  several  of  his  crew  killed 
and  wounded.  I  at  once  telegraphed  to  Tsim  Sha 
Tsiii  Police  Station  for  a  launch  to  remove  the 
wounded  to  hospital.  I  then  went  on  board  the 
junk,  where  I  found  things  generally  as  he  had 

"  No  3  Police  Launch  (with  Inspector  Kemp  and 
Sergeant  Gourlay  on  board)  arrived  soon  after,  and 
removed  the  dead  bodies  to  the  public  mortuary  and 
the  wounded  men  to  the  Government  Civil  Hospital. 

"  I  inspected  the  junk  on  the  morning  of  the 
I  ith  inst.  I  found  eight  bullet-holes  in  the  wood- 
work. These  bullets  had  all  been  fired  in  from 
the  starboard  and  stern.  I  also  saw  four  or  five 
blackened  spots  on  the  deck  where  powder  had 
been  exploded,  and  marks  of  scorching  round  the 
rudder-post,  where  some  matting  had  caught  fire. 
On  the  stern  and  stern-rails  I  found  spots  of  blood, 
as  if  some  one  had  been  cut  down  and  fallen  over 
the  rail.    Other  blood-stains  that  I  saw  on  the  deck 

on  the  loth  inst  had  been  then  washed  ofiF.    ' 



"  On  the  deck  and  in  the  stem  cabins  I  found 
five  empty  clothes -boxes,  all  of  which  had  been 
forced  open.  When  I  boarded  the  junk  on  the 
loth  inst  I  found  two  loaded  rifles  lying  on  the 
deck.  These,  I  was  informed,  were  left  by  the 
pirates.  They  are  old  muzzle-loaders,  almost  un- 
serviceable, but  appear  to  have  been  fired,  probably 
by  applying  a  lighted  joss-stick  to  the  powder  in 
the  nipples.  I  saw  no  other  arms  or  any  ammuni- 
tion on  board  the  junk,  and  there  is  none  entered 
on  the  license.  I  think  there  is  little  doubt  but 
that  this  is  a  genuine  case  of  piracy. 

"  I  will  furnish  a  list  of  all  the  articles  stolen, 
that  can  be  described,  as  soon  as  possible. 

"  I  have,  etc., 

(Sd.)    "  J.  Gauld,  P.S.  59. 

"  The  Honorable  E.  H.  May,  C.M.G., 
"  Capt  Supt.  of  Police." 

Piracy  on   West  River  between  Canton  and 


^^  December  28,  1898. 

"  The  Chung  On  is  a  small  Chinese  steamer  of 
about  seventy  tons  burden,  running  between  Can- 
ton and  Wuchow.  On  the  28th  December,  1898, 
she  left  Wuchow  for  Canton  with  passengei^  for 
various  ports  between  there  and  Canton.  It  ap- 
pears that  ten  pirates  boarded  her  at  Wuchow,  as 
passengers,  and  at  Do  Sing  several  more  came  on 

R  257 


board  with  some  large  earthen  -  ware  jars,  which 
they  said  contained  food.  All  went  well  until 
after  the  pirates  commenced  business  at  Chat 
Par-lin.  They  broke  the  jars,  and  in  one  there 
were  revolvers  and  in  the  other  ammunition. 

"  The  Chinese  captain  got  hold  of  a  pistol,  and 
was  holding  it  out  of  one  of  the  wheel-house  win- 
dows ready  to  shoot  any  one  who  came  along,  but 
one  of  the  pirates  crept  softly  round  the  house  and 
grabbed  the  pistol  before  the  captain  was  able  to 
make  use  of  it.  The  pirates  then  shot  and  mor- 
tally wounded  him,  and  while  he  was  lying  help- 
less on  the  deck  they  opened  his  jacket  and 
emptied  all  the  chambers  of  a  revolver  into  his 
stomach.  After  he  was  dead  they  cut  ofiF  two 
fingers  and  two  toes.  One  sailor  was  wounded  in 
the  shoulder  by  a  bullet,  and  another  man  in  the 
thigh.  The  pirates  then  took  all  the  valuables, 
money,  and  clothes  from  the  passengers,  and  left 
the  vessel  at  Do  Kee,  a  place  about  a  mile  below 
Yuet  Sing.  The  passengers  refused  to  go  on  to 
Canton,  and  the  steamer  was  headed  for  Tak-hing. 
As  the  officials  there  seemed  to  be  unable  to  do 
anything,  the  vessel  was  steered  to  Wuchow,  where 
the  affair  was  reported  to  the  officials.  That  was 
about  eleven  o'clock  on  the  night  of  the  29th 

The  above  instances  illustrate  very  clearly  the 
want  of  security  for  commercial  enterprises  and 
development.  There  is  no  real  security  for  com- 
merce throughout  the  whole  of  China.     Attention 



is  called  to  this  fact  in  chapter  on  "Chinese 
Armies  and  Navies." 

The  merchants  were  unanimous  anVl  emphatic 
in  their  protests  against  any  such  line  of  policy 
being  pursued  as  is  embodied  in  the  expression, 
"Sphere  of  Influence."  They  brought  to  my 
notice  the  great  predominance  of  British  goods, 
which  form  the  Export  Trade  from  the  provinces 
of  Kwangsi  and  Kwangtung. 

These  tables  convey  much  interesting  instruc- 
tion on  this  point. 


Season  ending  May  31,  1898. — 1897  to  1898. 

The  Total  Export,  value  Mexican  Dollars,  19,417,450. 
Ficuls  29,873  at  $650  per  picul  was  bales  37,341. 








English  firms 





German  firms    . 





French  firms     . 






English  Firms  does    not  include  1674  Piculs  shipped  by 


Erported  English  firms     .     .    .     Ficuls  20,627*  77*23 

"        German  firms    ...        "        6,084  22.77 

"        French  firms      ..."  nil  — 

TEA. — Entirely  in  British  hands. 

*  Not  including  6775  Piculs  shipped  by  Parsees. 



Exports  from  Canton  for  1897,  to  Europe  and  America, 
BUT  NOT  Including  Shipments  by  Parsees,  which 
Shipments  are  very  large. 

Approximate  Value 

500,000  Pigs'  Bristles 
400,000  Preserves  . 
250,000  Canes  ,  . 
650,000  Cassia  .  . 
50,000  Cassia  Buds 
2,500,000  Matting 
900,000  Ess.  Oil 

Engush  and 

5,654  piculs 
3S»ooo     " 
30,000  bales 
34,000  piculs 

87s  " 

452,000  rolls 
2,775  piculs 

400,000  Duck  Feathers  .     26,000 
1,000,000  Fire  Crackers    .  190,000 



a  few  hundreds 



(from  Tonquin) 





British 480  cases 

German 950    " 

French nil 

The  British  merchants  pointed  out  how  detri- 
mental a  French  "  Sphere  of  Influence  "  over  these 
two  provinces  would  be  to  a  trade  which  is  almost 
entirely  in  their  hands.  They  called  my  attention 
to  the  result  of  a  French  sphere  of  influence  on 
British  trade  in  Madagascar  and  Tonquin,  and 
conjectured  that  a  similar  result  would  surely  fol- 
low the  admission  of  a  French  "  Sphere  of  Influ- 
ence "  over  Kwangsi  and  Kwangtung. 

The  merchants  begged  me  to  assure  the  Asso- 
ciated Chambers  of  Commerce  that  the  policy  of 

the  "  Open  Door "  and  equal  opportunity  for  the 



trade  of  all  nations  was  absolutely  essential  for  the 
continuance  of  British  trade  in  the  South  of  China, 
The  merchants  asked  my  opinion  as  to  the  native 
authorities  according  preferential  rights  to  native 
bottoms  as  against  British -owned  steamers.  I 
informed  them  that  I  would  represent  the  case  to 
the  Associated  Chambers. 

While  I  was  at  Canton  his  Excellency  the 
Viceroy  Tan  Chung  Lin  was  seriously  ill.  His 
Excellency  is  of  a  great  age,  being  over  eighty-two. 
He  paid  me  the  honor  of  sending  his  deputy,  his 
Excellency  Kwei  Yun,  to  call  upon  me  and  to  ex- 
plain  how  sorry  he  was  not  to  be  able  to  receive 
me,  owing  to  his  ill-health.  The  Viceroy  also  sent 
me  a  message  by  his  deputy,  hoping  that  I  would 
let  him  know  if  there  was  anything  that  he  could 
do  to  oblige  me,  as  he  knew  I  had  come  to 
China  in  the  interest  of  Anglo-Saxon  trade  and 

I  asked  the  Deputy  if  I  could  see  the  forts,  the 
arsenal,  and  the  powder  factory.  I  received  in 
reply  a  message  from  his  Excellency  to  say  that 
he  would  be  delighted,  and  a  request  that  I  should 
write  him  a  letter,  giving  him  my  opinions  con- 
cerning them.  He  also  said  he  would  place  a  man- 
of-war  at  my  disposal  in  order  that  I  might  visit 
the  fort  in  comfort  and  conveniently. 

I  had  a  long   interview  with   his  Excellency 

Kwei  Yun  and  some  other  high  officials  as  to  the 

question  of  the  future  security  and  development 

of  Anglo-Saxon  trade  and  commerce.     His  Ex- 



cellency  Kwei  Yun  told  me  that  he  was  not  afraid 
of  disturbances. 

When  I  pointed  out  to  him  the  extent  of  the 
damage  caused  to  trade  by  the  continual  piracies, 
he  said  that  the  Viceroy  intended  that  they  should 
be  stopped,  but  that  it  was  very  difficult  to  get 
hold  of  the  real  offenders,  owing  to  the  innumer- 
able canals  and  waterways  where  they  were  able 
to  conceal  themselves. 

I  remarked  that  we  had  an  adage  in  England, 
"  Where  there  is  a  will  there  is  a  way."  I  informed 
his  Excellency  that,  as  these  piracies  were  disturb- 
ing British  trading  interests,  I  should  have  to  refer 
to  them  in  my  Report  to  the  Associated  Cham- 
bers of  Commerce.  He  said  he  would  be  careful 
to  inform  the  Viceroy  that  British  traders  were 
much  concerned  in  the  matter. 

I  asked  his  Excellency  about  the  mineral  re- 
sources of  the  province.  His  Excellency  said  that 
the  province  was  very  rich  in  minerals,  and  that 
the  Chinese  themselves  were  just  about  to  open 
up  a  coal-mine  near  Pakhoi.  On  my  asking  him 
if  the  finances  of  the  province  were  in  a  sounder 
and  more  satisfactory  condition  than  other  prov- 
inces which  I  had  visited,  he  answered  that  they 
were  sufficiently  well  off  to  meet  ordinary  circum- 

In  my  second  interview  with  his  Excellency 
Kwei  Yun  I  called  attention  to  the  continual  dis- 
turbances throughout  China,  so  fatal  to  the  well- 
being  of  trade,  and  pointed  out  that  these  disturb- 



ances  were  common  in  the  province  of  Kwangtung. 
I  also  pointed  out  the  necessity  for  reorganizing 
the  Chinese  Army  under  foreign  officers,  in  order 
to  give  that  police  security  which  countries  trad- 
ing with  China  have  a  right  to  expect 

I  also  said,  if  disturbances  continued,  and  the 
Chinese  Government  were  unequal  to  quelling 
them,  China  was  certain  to  be  broken  up,  as  for- 
eign Governments,  in  defence  of  their  trading  in- 
terests, would  be  compelled  to  take  over  Spheres 
of  Influence. 

His  Excellency  saw  the  point,  and  said  he  would 
convey  my  remarks  to  the  Viceroy.  I  could  get 
no  opinion  from  his  Excellency  as  to  the  neces- 
sity of  reorganizing  the  Chinese  Army.  To  any 
pointed  question  I  asked  him  he  invariably  re- 
plied that  he  would  speak  to  the  Viceroy  on  the 
matter.  For  this  reason  the  meeting  was  unsatis- 
factory, as  his  Excellency  naturally  could  not  ex- 
press his  opinions,  the  constituted  authority  being 
the  Viceroy. 

He  declared  that  there  were  20,ocx)  soldiers  in 
the  province,  armed  with  Mauser  rifles,  but  ad- 
mitted that  they  had  never  been  drilled  or  dis- 



The  estimated  population  is  50,000 


The  total  value  of  trade  in  1897  was  Hk.  Taels  1,912,711 
(over  ;£'2  70,000). 

The  total  tonnage  of  shipping  entered  and  cleared  in  1897 
was  52,188,  of  which  41,402  was  British. 

WucHow  was  first  opened  to  foreign  trade  by  a 
special  article  of  the  Burmese  Frontier  Convention, 

I  had  not  time  to  visit  Wuchow,  but  Mr.  Hosie, 
the  British  Consul,  kindly  came  down  to  Canton 
to  meet  me,  and  gave  me  much  valuable  informa- 

Mr.  Hosie  informed  me  that  the  populace  are 
rapidly  arming  all  round  Wuchow,  and  that  a  ris- 
ing might  break  out  at  any  moment.  He  thought 
that  if  it  did  break  out  it  would  be  a  purely  local 
rising  against  the  Chinese  authorities  themselves. 
I  asked  him  if  such  a  rising  would  not  aflFect  trade 
adversely,  and  also  if  he  could  give  me  some  de- 
tailed fact  to  report  to  the  Associated  Chambers 

in  order  to  substantiate  his  statement.     He  re- 



plied  that  a  rising  at  Wuchow  broke  out  in  1898. 
There  was  great  loss  of  property,  and  trade  was 
stopped  for  two  months.  The  southeastern  part 
of  Kwangsi,  the  richest  part  of  the  province,  was 
most  seriously  affected,  and  to  a  great  extent  de- 
populated. This  part  of  the  province  is  a  great 
rice  country,  and  it  also  grows  tea  and  cassia. 
There  are  large  paper  industries  here.  Silk  and 
sugar  are  also  exported.  The  Wuchow  trade 
shows  great  promise,  although  the  port  was 
opened  so  recently  as  1897,  and  if  it  were  not  for 
the  constant  disturbances  in  the  neighborhood 
trade  would  be  considerably  developed.  Since 
the  new  navigation  laws  came  into  force,  in  June, 
1898,  only  one  steamer  of  very  small  tonnage  has 
started.  She  is  used  for  towing;  under  the  re- 
strictions she  is  only  allowed  to  tow  between  Wu- 
chow and  a  spot  within  a  few  hundred  yards  of 
Samshui,  which  is  the  limit  of  the  area  of  the  port 
where  she  is  registered — Wuchow.  She  is  under 
the  British  flag. 

Wuchow  is  an  open  port,  but  there  is  no  Anglo- 
Saxon  settlement  or  concession.  The  area  exempt 
from  likin  is  far  larger  than  at  Canton,  where  there 
are  foreign  concessions. 

Mr.  Hosie  suggested  that  if  a  railway  was  con- 
structed between  Wuchow  and  Chungking  by 
way  of  Kweiking  and  Kweiyang,  the  capitals  of 
Kwangsi  and  Kweichow,  respectively,  goods  which 
now  take  three  months  or  more  getting  to  Hong 

Kong  could  be  delivered  in  four  days.     It  would 



certainly  avoid  the  gorges  between  Chungking  and 
Ichang.  The  route  proposed  has  not  been  sur- 
veyed, but  I  am  told  it  presents  no  very  great 
difficulties.  At  a  time  when  so  many  concessions 
are  being  given  for  railways  in  China  in  order  to 
develop  trade,  I  think  it  right  to  bring  this  sug- 
gestion to  the  notice  of  the  Associated  Chambers 
of  Commerce. 

Mr.  Hosie  gave  me  an  instance  to  prove  that 
security  was  wanting  in  this  part  of  China.  He 
told  me  that  on  June  30,  1898,  at  the  commence- 
ment of  the  trouble  near  Wuchow,  the  Chinese 
authorities  had  sent  four  guards  for  his  protection 
at  the  Consulate  against  the  rebels.  On  the  after- 
noon of  that  date  these  guards  ran  to  Mr.  Hosie 
and  said:  "The  rebels  are  coming;  will  you  lend 
us  your  rifle?"  On  making  inquiries,  he  dis- 
covered that  the  four  guards  had  only  one  rifle 
between  them.  Mr.  Hosie  did  not  lend  them  his 



In  the  reference  I  received  from  the  President 
of  the  Associated  Chambers  of  Commerce  I  was 
particularly  asked  to  report  "  whether  the  organ- 
ization of  the  Chinese  civil  and  military  adminis- 
tration is  sufficiently  complete  to  insure  adequate 
protection  to  commercial  ventures,"  I  therefore 
lost  no  opportunity  of  ascertaining  for  the  infor- 
mation of  the  Chambers  of  Commerce  the  strength, 
efficiency,  and  organization  of  the  different  forces, 
both  naval  and  military.  I  also  went  to  all  the 
forts  which  form  the  coast  and  river  defences  of 
the  Chinese  Empire,  and  in  order  to  find  out  how 
the  forces  were  equipped  and  maintained  I  visited 
all  the  arsenals. 

The  various  Viceroys  gave  me  every  facility  to 
see  all  that  was  possible.  They  asked  me  if  I 
would  send  them  memoranda  giving  my  frank 
opinion  as  to  the  efficiency  of  all  I  saw.  As  the 
Viceroys  allowed  me  to  see  everything  with  a  view 
to  eliciting  my  opinion,  it  would  not  be  proper  for 
me  to  make  public  all  that  I  became  acquainted 
with,  but  enough  will  be  found  in  the  following 

Reports  to  show  that  no  security  whatever  exists 



for  development  of  British  trade  and  commerce 
within  the  Chinese  Empire ;  and,  further,  that  no 
security  exists  now  for  British  trade  outside  the 
Treaty  ports.  I  refer  to  that  security  which  only 
can  be  given  by  effective  military  and  police  or- 
ganization. It  may  have  been  observed  in  pre- 
vious parts  of  this  Report  that  the  Viceroys  them- 
selves clearly  gave  me  to  understand  that  in  the 
event  of  serious  disturbances  occurring  they  had 
not  the  means  to  cope  with  them. 

No  one  knows  the  real  strength  of  the  Chinese 
armies,  not  even  the  Chinese  Government  itself. 

The  military  forces  are  divided ;  some  are  Man- 
chu,  and  some  are  Chinese.  The  Manchu  forces 
are  quite  exclusive,  no  Chinese  serving  in  their 
ranks ;  but  the  Chinese  forces  have  some  Manchus 
among  them. 

The  armies  in  the  North  and  about  Peking  are 
nearly  all  commanded  by  Manchu  princes.  The 
Manchu  armies  are  supposed  to  be  170,000  strong; 
but  there  is  no  Manchu  army  efficient  either  in 
drill,  discipline,  or  organization  throughout  the 
Empire.  The  Manchu  force  is  divided  and  quar- 
tered in  most  of  the  big  towns  throughout  China 
— ^such  as  Nanking,  Hangchow,  Foochow,  Can- 
ton, and  other  places.  All  the  Manchu  armies 
are  under  the  command  of  Manchu  or  Tartar 
generals.  They  have  considerable  privileges  over 
and  above  those  allowed  to  the  Chinese.  Every 
Manchu,  whether  in  the  army  or  not,  is  supposed 

to  be  given  his  rice  and  3  taels  a  month  by  the 




Government.  If  not  belonging  to  the  army,  he  is 
liable  to  be  enrolled  if  required.  Nobody  knows 
the  amount  of  Imperial  taxation  that  is  devoted 
to  pay  the  Manchus.  It  is  variously  computed  as 
from  one  to  three  millions  sterling.  Like  other 
sums  in  the  hands  of  the  Government,  most  of  the 
money  finds  its  way  into  the  pockets  of  officials 
and  is  not  expended  as  intended.  The  Viceroys 
of  the  provinces  have  no  command  or  authority 
over  Manchu  armies  commanded  by  Manchu  gen- 
erals. The  Manchu  generals  have  considerable 
rights  in  the  provinces  where  they  are  quartered 
over  the  Manchu  subjects. 

All  the  armies  in  the  provinces  are  maintained 
at  the  expense  of  the  Viceroys,  with  the  exception 
of  the  Manchu  garrisons.  In  the  province  of 
Chihli,  General  Yuan  Shi  Kai's  army  and  the  Im- 
perial armies  at  and  around  Peking  are  maintained 
by  the  Board  of  Revenue  out  of  Imperial  taxes. 
These  State-paid  Imperial  armies  are  not  supposed 
to  be  sent  away  from  the  vicinity  of  Peking.  Every 
soldier  throughout  the  Empire  is  supposed  to  re- 
ceive 3  taels  (gs.)  a  month.  There  are  different 
systems  in  every  province  and  in  every  army  as  to 
pay,  food,  and  clothing.  In  some  armies  the  men 
are  paid  to  feed  and  clothe  themselves.  In  other 
armies  they  are  fed  and  clothed.  This  matter  is 
left  entirely  in  the  hands  of  the  general  command- 
ing. As  the  generals,  like  all  authorities  in  China, 
only  have  a  nominal  salary,  they  make  large  profits 

or  squeezes  during  their  command.     In  order  to 



report  an  instance,  I  questioned  one  of  those  in 
command  when  in  Peking.  He  informed  me  that 
he  commanded  10,000  men.  I  ascertained  that 
all  he  actually  commanded  was  800.  His  method 
is  common  to  China.  He  receives  the  money  to 
pay  and  feed  and  clothe  10,000  men.  If  his  army 
was  to  be  inspected,  he  hires  coolies  at  200  cash 
(Sidf.)  a  day  to  appear  on  parade.  This  is  well 
known  to  the  inspecting  officer,  but  he  receives  a 
douceur  to  report  that  he  has  inspected  the  army 
and  has  found  it  in  perfect  order. 

The  army  is  entirely  a  voluntary  service,  but 
when  once  a  man  has  joined  it,  it  is  difficult,  if  not 
impossible,  to  leave  it. 



On  October  27,  1898,  I  went  to  Hsiao  Chan  to 
visit  General  Yuan  Shi  Kai,  and  to  attend  a  re- 
view of  his  troops.  I  stayed  two  days  and  one 
night  with  the  General,  and  during  that  time  I 
not  only  saw  all  his  troops  paraded  and  ma- 
noeuvred, but  had  ample  opportunity  to  examine 
the  equipment  of  all  their  arms.  I  also  visited  the 
stores,  clothing,  and  provisions,  made  myself  ac- 
quainted with  the  complement  of  each  regiment, 
and  went  carefully  through  the  monthly  pay- 
sheets  of  the  whole  army.  I  have  every  detail 
connected  with  the  establishment  and  mainten- 
ance of  this  force. 



The  strength  of  the  army  was  7400  men — most- 
ly Shantung  men.  These  and  the  Hunanese  are 
reported  to  make  the  best  soldiers  in  China.  Gen- 
eral Yuan  Shi  Kai  is  a  Chinaman,  and  his  army 
is  composed  of  Chinese.  The  infantry  were  armed 
with  Mauser  rifles — German  made.  He  had  ten 
6 -gun  batteries  of  artillery  of  different  calibers, 
throwing  from  i-lb.  to  6-lb.  projectiles.  The  cav- 
alry were  armed  with  lances  and  a  Mauser  infan- 
try rifle.  On  parade  the  whole  force  appeared  an 
exceptionally  smart  body  of  men  of  extremely  fine 
physique.  They  were  evidently  well  fed,  and  their 
uniforms  were  very  serviceable  and  well  kept. 
Most  other  armies  are  clothed  in  an  ordinary 
Chinese  dress,  with  a  large  badge  sewn  on  in  front 
and  rear.  At  my  request  the  General  put  them 
through  various  parade  movements,  and  then  car- 
ried out  manoeuvres  in  the  surrounding  country 
which  proved  to  me  that  both  officers  and  men 
were  thoroughly  conversant  with  their  duties. 
Their  discipline  was  excellent.  With  the  excep- 
tion of  the  artillery  and  the  Maxims,  all  equipment 
was  serviceable  and  efficient.  I  suggested  to  the 
General  to  practically  test  the  equipment  of  the 
artiller}'  and  Maxims  by  galloping  them  over  some 
rough  ground.  The  result  was  to  prove  conclu- 
sively that  the  equipment  was  useless. 

I  found  the  General  most  energetic  and  intelli- 
gent, and  a  well-informed  and  well-educated  man. 
He  is  also  a  thoroughly  patriotic  Chinaman,  and 

most  loyal  to  the  dynasty.     He  expressed  genuine 



anxiety  as  to  the  future  of  his  country,  and  was 
quite  of  opinion  that  unless  she  undertook  some 
measures  for  her  own  preservation  nothing  could 
save  her  falling  to  pieces.  He  said,  now  that  China 
was  weak,  all  Europe,  while  professing  the  most 
sincere  good-will  towards  her,  was  seizing  portions 
of  the  Empire  under  cover  of  naval  and  military 
demonstrations.  I  asked  the  General  if  he  could 
make  any  suggestion  that  would  be  for  the  benefit 
of  China,  and  at  the  same  time  one  which  Eura 
pean  countries  would  assent  to.  The  General  an- 
swered that  no  proposal  that  the  Chinese  could 
make  would  receive  the  consent  of  the  European 
Powers ;  that  a  Chinese  would  naturally  make  a 
proposition  for  the  maintenance  of  the  Empire, 
while  European  countries  showed  by  their  actions 
that  they  wished  to  split  up  the  Empire  and  divide 
it  among  themselves. 

The  General  was  very  sympathetic  with  regard 
to  the  question  of  reorganizing  the  Chinese  Army 
as  one  Imperial  Army,  but  thought  that  the  com- 
mand and  the  finance  should  be  entirely  in  the 
hands  of  the  Chinese,  even  if  foreign  officers  were 

If  all  the  Chinese  generals  were  like  General 
Yuan  Shi  Kai  the  armies  and  their  financial  ar- 
rangements would  not  be  in  the  condition  they  are 
now.  General  Yuan  Shi  Kai  spends  the  money 
he  receives  for  his  army  as  intended.  He  person- 
ally superintends  the  payment  of  his  men's  wages 

and  the  distribution  of  rations  and  clothing. 



This  army  is  the  only  army  complete  in  all  de- 
tail, according  to  European  ideas,  that  I  found  in 
China;  and  for  this  reason  I  have  entered  thor- 
oughly into  its  equipment  and  efficiency. 

When  I  was  at  Peking  there  were  the  following 
armies  in  the  neighborhood: 


General  Sung,  who  is  reputed  to  be  a  very  able 
man,  but  is  now  eighty  years  old,  has  an  army  sup- 
posed to  be  20,000  strong  scattered  all  along  the 
coast  about  Kinchow.  As  a  matter  of  fact,  I  could 
not  make  out  that  there  were  more  than  10,000 
men — 5000  at  Kinchow,  3000  at  Chung-ho-so,  and 
2000  at  Shanhaikwan. 

They  are  well  armed  with  Mauser  rifles  and 
have  Krupp  artillery  and  Maxims.  Some  of  these 
men  have  been  well  drilled  by  German  officers. 


At  Lutai  there  were  thirty  camps  under  General 
Soon  Ching.  A  camp  is  a  square  fort  supposed 
to  accommodate  500  men.  They,  however,  rarely 
contain  more  than  250  men,  owing  to  the  system 
that  I  have  described.  Of  the  1 5,000  men  said  to 
be  there,  there  are  only  between  7000  and  8000. 
Colonel  Warranoflf,  belonging  to  the  Hussars  of 
the  Russian  Guard,  and  some  Russian  officers 
were  there.     They  had  superseded  five  German 

8  273 


officers  in  March,  1898,  who  had  been  instructing 
the  men.  There  is  no  drill  and  very  little  disci- 
pline among  these  men. 

I  met  one  of  these  German  officers,  whose  name 
was  Schaller.     I  also  met  Colonel  Warranoflf. 


There  were  about  10,000  Kansuh  troops  under 
General  Tung  Fu  Chan — mostly  Mohammedans 
—encamped  a  short  distance  from  Peking.  They 
were  a  most  disorderly  and  undisciplined  rabble, 
badly  armed  and  undrilled,  but  good  fighters.  They 
had  been  ordered  from  the  West,  where  they  had 
been  subduing  a  rebellion,  to  Peking.  While  I 
was  there  they  assaulted  and  nearly  killed  two 
British  engineers  who  were  working  on  the  line  at 
Fungtai.  They  also  broke  the  windows  of  the 
railway  station  and  damaged  some  boilers  and 
stores.  Their  presence  was  deemed  so  dangerous 
to  the  foreigners  that  the  foreign  Ministers  demand- 
ed their  withdrawal. 


Between  Hsiao  Chan  and  Tientsin  General  Nieh 
had  some  thirty  camps,  containing  about  13,000 
men.  Some  of  these  men  had  been  well  drilled 
by  German  officers.  They  are  well  armed  with 
Mauser  rifles,  artillery  of  mixed  caliber,  and  Max- 
ims, but  their  discipline  is  very  lax.     There  were 



five  Russian  instructors  there.  I  asked  for  per- 
mission to  visit  these  camps,  but  the  Chinese  offi- 
cials threw  every  obstacle  in  my  way. 


There  is  also  a  Peking  field  force,  commanded 
from  the  Palace,  of  especially  picked  men — 10,000 
strong.  They  are  quartered  in  the  Hunting  Park 
in  Peking.  They  are  well  armed  but  indifferently 


There  was  a  cavalry  camp  at  Kaiping,  the  sup- 
posed strength  of  which  was  1500  men.  Three 
Russian  officers  have  superseded  the  German  offi- 
cer who  was  drilling  these  men.  They  are  ex- 
tremely short  of  horses. 


It  is  reported  that  there  is  a  large  army  scattered 
about  in  Manchuria.  Though  fairly  armed,  they 
are  undrilled  and  undisciplined.  The  number  of 
this  army  is  variously  estimated  at  between  8000 
and  15,000  men.  The  name  of  the  general  com- 
manding  is  Yi-Ke-Tong. 


Besides  the  armies  that  I  have  enumerated,  there 
are  in  Mongolia  about  100,000  Mongolian  cavalry. 



They  are  excellent  men,  and  ruled  by  their  own 
princes  under  a  system  of  feudal  tenure.  They 
are  not  paid.  I  was  informed  that  they  are  de- 
voted to  the  present  dynasty. 

With  the  exception  of  Yuan  Shi  Kai's  army,  all 
the  armies  above  referred  to  have  little  or  no  firing 
practice,  and  none  of  them  have  any  organization 
whatever  for  transport*  It  seems  incredible,  but 
some  of  the  soldiers  are  still  practised  in  shooting 
with  bows  and  arrows  at  a  target.  When  at  Peking, 
I  saw  them  practising  in  an  open  space  near  the 
Observatory.  Hitting  the  target  is  a  detail  of 
minor  importance ;  the  real  merit  consists  in  the 
position  or  attitude  of  the  bowman  when  discharg- 
ing his  shaft. 



I  witnessed  a  review  of  the  garrison  of  Wuchang. 

There  were  about  450  men  and  a  battery  of  six 

guns.     About  200  of  these  men  were  very  well 

drilled,  smart,  and  well  dressed.     They  were  well 

armed  with  the  newest  German  pattern  Mauser 

rifle.     The  others  had  not  been  drilled,  and  I  was 

told  had  only  lately  been  enlisted.     The  guns  were 

drawn  by  men  and  not  horses.     These  were  5.3 

centimetre  Krupp  guns.     The  ammunition  was 

carried  by  the  gun's  crew.     The  cavalry  are  quite 

inefficient  in  their  present  condition.     The  Vice- 



roy  has  about  6000  troops  scattered  over  his  prov- 
inces, but  these  are  the  same  character  as  the 
ordinary  Chinese  soldier — undisciplined,  but  fairly 
armed.  Besides  this,  there  are  supposed  to  be 
10,000  Manchu  troops  about  300  miles  away,  be- 
tween the  Tung  Ting  Lake  and  Ichang.  They 
are  under  the  command  of  a  general  named  Ching 
Heng.  They  are  undisciplined  and  very  badly 



His  Excellency  the  Viceroy  Liu  Kwen  Yi  is 
supposed  to  have  20,000  troops  under  his  com- 
mand. I  saw  about  8000  of  them.  They  were 
a  fine  body  of  men ;  many  of  them  of  splendid 
physique.  The  majority  of  them  were  Hunan 
men.  The  infantry  were  armed  with  three  diflfer- 
ent  kinds  of  rifles,  this  being  observable  even  in 
companies.  Of  the  20,000  men  10,000  would  be 
required  to  garrison  the  forts  on  the  river.  The 
men  were  well  clothed  and  apparently  well  fed,  but 
not  well  drilled  or  disciplined. 

At  Kiangzin  there  is  a  garrison  of  3000  men 
under  General  Li,  which  comprises  two  six-gun 
batteries  of  artillery  and  two  squadrons  of  cavalry. 
I  saw  these  men  on  parade  as  well  as  manoeuvring 
over  a  country.  They  were  a  very  fine  lot  of  men, 
well  turned  out  and  well  drilled.  They  had  been 
drilled  by  German  officers,  who  had  left. 





His  Excellency  the  Viceroy  Hsu  Ying  Kwei  is 
supposed  to  have  an  army  of  some  8000  men  ;  but 
these  men  cannot  be  called  soldiers  at  all.  They 
are  mostly  coolies  wearing  the  military  badge  be- 
fore and  behind.  His  Excellency  is  commencing, 
however,  to  drill  some  troops,  and  has  enlisted 
some  fine  men.  I  saw  some  250  of  them.  They 
were  in  the  early  stages  of  learning  their  drill. 

There  is  a  small  Manchu  garrison  at  Hang- 



His  Excellency  the  Viceroy  of  Canton  is  sup- 
posed to  have  20,ocx>  men  under  his  command. 

Most  of  these  are  undrilled  and  undisciplined, 
and  many  of  them  unarmed.  Those  that  I  saw 
were  the  ordinary  Chinese  coolies. 

There  are  some  men  in  the  forts  very  well 
turned  out,  disciplined,  and  drilled. 

There  is  also  a  Manchu  garrison  at  Canton 
of  about  5000  men.  They  live  in  their  private 
houses,  and  are  entirely  undrilled  and  undisci- 
plined. All  these  troops  were  very  badly  armed, 
and  had,  apparently,  no  system  of  organization 
whatever.  As  an  instance,  I  observed  that  the 
guard   at  the  arsenal  were  armed  with  the  old 

muzzle-loading  Tower  muskets. 



The  town  of  Wuchow,  in  this  province,  is  garri- 
soned by  a  force  of  300,  totally  unarmed. 


In  Hunan  and  Szechuan  the  Viceroy  Kwei  is 
said  to  have  an  army  of  20,000  men.  They  are 
totally  undisciplined,  and  worthless  as  police,  as 
has  been  evinced  by  their  inability  to  put  down 
Yu  Man  Tsu's  rebellion,  which  has  lasted  ten  years. 

At  Cheng-tu  there  is  a  garrison  of  5000  Man- 
chu  troops,  but  they  are  like  the  others — undis- 
ciplined, undrilled,  badly  armed,  and  totally  ineffec- 

During  my  visit  to  the  different  armies  I  counted 
in   the   ranks  fourteen   different  descriptions  of 


Different  patterns  of  Mauser  rifles. 


5.  Winchester  Repeating. 

6.  Mannlicker. 

7.  Remington. 

8.  Peabody-Henry. 

9.  Sneider. 
ID.  Enfield. 

11.  Tower  Muskets  (smooth-bore). 

1 2.  Berdan. 

13.  Muzzle-loading  Gingal. 

14.  Breech-loading  Gingal. 


THE    BREAK-UP    OF    CHINA  , 

A  gingal  is  a  weapon  between  9  ft.  and  10  ft. 
long.  They  are  dififerent  lengths  in  dififerent 
armies ;  some  of  them  are  breech-loading,  others 
muzzle-loading.     Their  weights  vary  from  40  lbs.  I 

to  60  lbs.  Three  men  are  required  to  handle 
them.  When  in  action,  the  gingal  is  laid  along  the 
shoulders  of  two  men,  while  the  third  man  fires  it. 

I  also  saw  bows  and  arrows. 

As  proof  of  the  inefficiency  of  these  armies  to 
protect  life  and  property,  and  to  give  security  to 
trade  and  commerce,  the  following  list  of  disturb- 
ances is  appended,  showing  what  has  occurred 
since  the  beginning  of  1 898 : 


Spring,  1898. — A  serious  riot  in  which  the  Cus- 
toms House  and  the  houses  of  Messrs.  Jardine  & 
Matheson  were  burned  to  the  ground,  and  all  the 
buildings  and  boats  of  foreigners  set  on  fire.  A 
British  man-of-war  had  to  be  sent  there. 


Spring,  1898.  —  A  general  disturbance,  which 
the  Imperial  troops  were  in  no  way  capable  of 
quelling.  A  British  man-of-war  had  to  be  sent  to 


Spring,  1898.  —  Disturbances  occurred  in  the 
city;   incendiarism  and  looting.     Also  great  in- 



crease  of  piracy  on  the  West  River,  and  its  in- 
numerable tributaries. 


Summer,  1898.  —  Serious  rebellion,  in  which 
many  Chinese  authorities  lost  their  lives.  Two 
cities  were  sacked,  and  5000  troops  were  unable 
to  quell  it. 


Summer,  1898. — A  serious  riot,  in  which  launches 
were  attacked  and  looted.  A  British  man-of-war 
had  to  be  sent  to  Chinkiang. 


Since  1888.  —  Rebellion  of  Yu  Man  Tsu,  in 
which  many  lives  have  been  lost  and  property  to 
the  value  of  6,000,000  taels  (nearly  ;^  1,000,000 
sterling)  destroyed.    {See  chapter  on  *'  Hankow.") 


Autumn,  1898. — Serious  incendiary  fires,  in  one 
alone  of  which  1000  lives  were  lost  and  ;^  1,300,- 
000  worth  of  property  destroyed. 


Autumn,  1898. — A  disturbance  in  which  for- 
eigners and  members  of  the  British  and  American 

Legations  were  assaulted. 


AT  LUKOUCHIAO  (12   miles  from   Peking) 

Autumn,  1898. — A  serious  attack  was  made  on 
a  party  of  four  Englishmen  by  soldiers  of  the  Kan- 
suh  Army. 


End  of  1898. — The  murder  of  a  British  mis- 
sionary, Mr.  Fleming.  This  murder  was  undoubt- 
edly committed  with  the  connivance  of  the  au- 

Besides  these  there  is  an  open  rebellion  in 
Anhui,  and  disturbances  reported  from  Shantung 
and  Kansuh. 

China,  throughout  her  history,  has  been  one 
long  scene  of  rebellion  and  stern  repression,  but 
never  before  has  authority  been  in  so  weak  or  so 
helpless  a  condition,  the  financial  position  of  the 
Empire  hindering  the  Government  from  maintain- 
ing a  force  adequate,  in  either  numbers  or  effi- 
ciency, to  prevent  disturbances  and  rebellions. 

I  have  already  mentioned  that  some  of  the  troops 
at  Peking  still  practise  shooting  with  bows  and 
arrows.  Many  other  points  were  brought  to  my 
notice  which  would  be  ludicrous  if  they  were  not 
so  pitiful.  The  Consul  at  Wuchow  told  me  that 
during  the  late  riots  soldiers  were  armed  with  every 
sort  of  weapon — guns,  rifles,  and  blunderbusses. 
They  also  carried  long  brass  horns  and  gongs  and 

other  instruments  to  make  discordant  noises.   They 



patrolled  the  streets  and  the  outside  of  the  town. 
Many  were  totally  unarmed,  and  carried  only  a  bird- 
cage and  a  fan,  being  known  as  soldiers  by  their 
military  badge. 

It  must  not  be  imagined  from  the  foregoing  re- 
marks that  the  Chinese  would  make  bad  soldiers. 
From  all  that  I  have  heard  and  seen  I  believe  they 
would  make  splendid  soldiers  if  properly  trained, 
and  if  fed,  paid,  and  clothed  according  to  their 
contract  with  the  authorities.  They  have  all  the 
characteristics  necessary  to  make  a  good  soldier. 
They  are  sober,  obedient,  easily  managed,  and  very 
quick  at  learning.  There  were  many  instances  of 
heroic  bravery  during  the  Chino-Japanese  War. 
General  Ysu  was  found,  after  the  battle  of  Yalu, 
surrounded  with  the  bodies  of  hundreds  of  his  own 
soldiers,  who  had  died  around  him. 

General  Tso  was  so  beloved  and  respected  by 

his  men  that,  before  the  battle  near  Newchwang, 

the  wounded  refused  to  remain  in  the  hospital,  and 

some  were  actually  carried  by  their  comrades  to  the 

scene  of  action  to  fight  for  their  general.     The 

courage  and  bravery  of   the  coolies  from  Hong 

Kong  who  worked  the  scaling-ladders  at  the  forts 

of  Taku  in  i860  will  never  be  forgotten  by  the 

British  engaged  in  that  campaign.   No  just  opinion 

of  the  fighting  capabilities  of  the  Chinese  can  be 

founded  upon  their  late  war  with  Japan.     When 

their  troops  were  fairly  armed   they  had  grossly 

incompetent    leaders.     When    they  had    gallant 

leaders  the  soldiers  were  either  badly  armed  or 



had  no  ammunition.  Almost  every  known  rifle 
was  to  be  found  in  their  ranks,  and  before  an  action 
ammunition  was  served  out  in  handfuls,  with  no 
regard  to  the  weapon  the  soldier  carried.  These 
handfuls  included  all  classes  of  rifle  and  pistol  am- 
munition. The  men  are  good  enough,  but  they 
need  capable  leaders  and  honest  administration. 


The  Chinese  Navy  is  divided  into  two  squad- 
rons— the  Peyang  Squadron  in  the  North,  and  the 
Nanyang  Squadron  in  the  South. 

The  Peyang  Squadron  consists  of  three  cruisers 
of  3400  tons,  German  built; 

One  torpedo  cruiser,  German  built ; 

One  torpedo  gun-boat. 

I  visited  these  vessels. 

Two  armored  cruisers  of  48CX)  tons  have  been 
built  and  paid  for. 

They  are  still  lying  at  Armstrong's,  owing  to 
the  Chinese  Government  being  short  of  money 
and  men,  and  all  their  dockyards,  except  one — 
Foochow,  which  is  useless — being  taken  by  foreign 

There  are  also  four  torpedo  destroyers  lying  at 
Stettin  under  similar  conditions. 

The  Nanyang  Squadron  is  composed  of: 

Six  cruisers  of '3500  tons,  German  built; 

One  cruiser  of  1800  tons,  built  in  England; 



Four  old-fashioned  gun-boats  of  400  tons,  built 
in  England ; 

Four  torpedo-boats,  1 30  feet,  built  in  Germany — 
modern,  and  in  excellent  order. 

I  visited  these  vessels,  and  spent  a  week  on 
board  one  of  the  cruisers,  which  was  placed  at  my 
disposal  by  the  kindness  of  the  Viceroy  of  the 
Kiang  Liang  provinces,  in  order  that  I  might  visit 
the  forts  on  the  Yangtse. 

The  Chinese  Fleet  as  a  whole  is  undermanned, 
but  there  are  on  board  many  men  well  trained  by 
English  instructors. 

Many  Chinese  authorities  asked  my  advice  as 
to  the  fleet.  I  recommended  them  to  put  what 
ships  they  had  left  in  order  for  police  purposes, 
pointing  out  that  such  vessels  should  be  able  to 
stop  the  piracies  at  and  about  Canton.  I  strong- 
ly recommended  them  not  to  expend  any  more 
money  for  naval  armaments,  since  the  work  of 
protection  which  devolved  upon  them  demand- 
ed rather  a  military  than  a  naval  development 
In  my  opinion,  the  first  thing  they  ought  to 
do  is  to  provide  that  security  for  trade  and 
commerce  which  only  militar}^  and  police  can 

I  called  their  attention  to  many  cases  of  wasteful 
expenditure,  and,  in  particular,  to  the  fact  that 
they  had  about  the  coast  and  in  the  river  hundreds 
of  men-of-war  junks,  entailing  an  absolutely  useless 

outlay  of  money. 



The  Chinese  have  only  one  dock-yard  left,  which 
is  at  Foochow. 

I  ascertained  the  budget  and  visited  the  yard. 
The  waste  of  money  is  appalling.  There  is  one 
dry -dock  capable  of  docking  a  cruiser  of  about 
3000  tons.  The  wings  of  the  dock  are  cracked, 
and  I  was  told  that  the  dock-yard  authorities  were 
anxious  about  the  foundations. 

Some  torpedo-boats  are  at  and  about  Hong 
Kong  and  Canton,  but  are  employed  under  the 
Imperial  Maritime  Customs. 

I  recommended  the  Chinese  to  sell  the  cruisers 
at  Armstrong's  and  the  torpedo  destroyers  at 


While  at  Newchwang  I  endeavored  to  obtain 
the  numbers  of  Russian  troops  in  Eastern  Siberia 

and  Manchuria,  as  well  as  the  localities  in  which 
they  were  quartered.  The  authorities  I  consulted 
were  reliable,  and  had  been  both  in  Eastern  Si- 
beria and  Manchuria.  The  appended  list  is  a 
copy  of  the  information  given  to  me: 



Staff  I  St  Brigade  Eastern  Siberian  Infantry  of  the  Line; 
2  Batteries  (III.  and  X.)  Eastern  Siberian  Infantry  of 
the  Line ; 



2  Batteries  (III.  and  IV.)  2d  Eastern  Siberian  Regi- 
ment Artillery ; 

Staff  Eastern  Siberian  Engineer  Battalion ; 

2  Companies  of  Engineers ; 

2  "         I  St  Battalion  Ussuri  Railway  Corps. 


I  Company  ist  Battalion  Ussuri  Railway  Corps. 

Grap  Kaya. 

1  Battalion  (VIII.)  ist  Brigade  Eastern  Siberian  In- 
fantry of  the  line. 

Kamsa  Ruiboloff. 

2  Squadrons  (one  only  in  time  of  peace)  of  Cavalry ; 
Battalion  of  Ussuri  Cossacks. 


I  Squadron  ist  Battalion  Prunivosk  Cavalry. 


I  Battalion  (II.)  Infantry  ist  Brigade  Eastern  Siberian 
Rifles ; 

I  Squadron  (V.)  ist  Regiment  Cavalry  Trans-Baikal 


Staff  of  the  Commander-in-Chief  of  the  troops  of 
Southern  Ussuri ; 

Staff  ist  Brigade  Eastern  Siberian  Rifles; 

3d  Battalion  (III.»  IV.,  and  V.)  Eastern  Siberian 
Rifles ; 

Staff  Ussuri  Cavalry  Brigade ; 

Staff  ist  Regiment  Cavalry  Trans-Baikal  Cossacks ; 

3  Squadrons  (I.,  II.,  and  III.)  ist  Regiment  Cavalry 
Trans-Baikal  Cossacks ; 

Staff  ist  Regiment  Eastern  Siberian  Artillery; 

4  Batteries  (I.,  II.,  V.,  and  ist  Mortar  Battery); 
I  Company  ist  Battalion  Ussuri  Railway  Corps. 





I  Squadron  (VI.)  ist  Regiment  Cavalry  Trans-Baikal 


1  Battalion  (ist)  Infantry  Brigade  Eastern  Siberian 
Fusiliers ; 

Staff  Prunivosk  Cavalry  Battalion. 


2  Battalions  (I.  and  VII.)  ist  Brigade  Eastern  Siberian 
Infantry  of  the  Line ; 

Staff  ist  Battalion  Ussuri  Railway  Corps ; 
'  Staff  Vladivostock  Fortress ; 

5  Battalions  (20  companies)  Fortress  In- 
fantry ; 

6  Companies  of  Garrison  Artillery ; 
I  Company  of  Garrison  Engineers ; 
I  Torpedo  Corps. 


I  Battalion  (VIII.)  2d  Brigade  Eastern  Siberian  Rifles; 
I  Squadron  (IV.)  ist  Regiment  Cavalry  Trans-Baikal 


1  Battalion  (V.)  ist  Brigade  Eastern  Siberian  Infantry 
of  the  Line. 


Staff  2d  Brigade  Eastern   Siberian   Infantry  of  the 

2  Battalions  (IX.  and  XI.)  Eastern  Siberian  Infantry  of 
the  Line. 


Staff  2d  Brigade  Eastern  Siberian  Rifles ; 
4  Battalions  (VI.,  VII.,  IX.,  and  X.)  Eastern  Siberian 



4  Batteries  (III.,  IV.,  VI.,  and  2d  Mortar  Battery)  ist 
Regiment  Eastern  Siberian  Artillery. 


I  Squadron  2d  Prunivosk  Cavalry  Battalion. 

The  ten  battalions  of  Rifles  are  being  reorganized. 
In  April,  1896,  their  efifective  strength  was  increased 
by  one-third,  and  this  was  again  done  in  1897. 

I  was  told  that  a  reorganization  of  the  Cavalry 
has  lately  been  effected,  having  for  its  object  an 
increase  in  the  number  of  squadrons  forming  each 
regiment.  Thus  to  the  above  list  five  squadrons 
of  1st  Regiment  of  Ussuri  Cossacks  have  been 
added.     They  are  stationed  at  Novokirosik. 

Briefly  there  are  some 

28,000  men  at  Vladivostock. 

20,000        *'       Nikolski,  where  there  are  6  Generals. 
8,000        "      filagovensk. 

40,000        "       Haborosk  and  neighborhood,  with  Com- 
mander-in-Chief and  Headquarters  and 
12  Generals. 
7,000  or  8,000  men  at  Kirin. 

About  1 20,000  men  in  Eastern  Siberia  and  Man- 
churia altogether.  At  Newchwang  there  were  200 
men  when  I  was  there,  and  I  was  informed  that 
there  were  40  men  at  a  place  called  Liao  Yang, 
where  there  is  a  coal-mine. 

The  Russians  are  now  building  three  docks  at 
Vladivostock,  each  big  enough  to  take  the  Rossza, 
and  each  at  a  cost  of  nineteen  to  twenty  millions 
of  roubles.  Also  a  wharf  2^  miles  long,  and  bar- 
racks to  hold  8000  to  10,000  men. 
T  289 




By  permission  of  the  Viceroys  I  visited  over 
forty  of  the  forts  and  batteries  which  form  the  coast 
and  river  defence  of  the  Chinese  Empire.  At  all 
these  forts  I  asked  that  the  guns'  crews  might  man 
the  guns  in  order  that  their  state  of  efficiency  should 
be  tested.  The  guns  were  laid  and  trained,  and 
some  of  them  were  fired.  Some  of  the  forts  are 
immensely  powerful,  and  a  few  guns'  crews  knew 
how  to  handle  the  guns.  Physically,  the  garrison 
artillery  throughout  the  Empire  are  a  splendid 
body  of  men. 

The  forts  are  armed  with  every  conceivable  sort 
of  gun ;  most  of  the  batteries  with  muzzle-loading 
guns ;  the  modern  forts  with  heavy  modern  breech- 
loading  artillery  of  the  best  description.  Many  of 
these  guns  are  made  in  the  Chinese  arsenals  from 
British  and  German  patterns. 

The  Viceroys  asked  me  to  write  and  say  what  I 
thought  of  their  forts.     This  I  did. 

In  one  of  these  forts  there  was  a  heavy  battery 

of  6o-ton  muzzle-loading  guns,  which  were  loaded 

by  depressing  the  muzzle  into  the  magazine.     I 



ventured  to  point  out  to  the  General  the  danger  of 
this  proceeding,  and  the  likelihood,  through  care- 
less sponging,  of  the  magazine  being  blown  up. 

The  General  congratulated  me  on  my  acumen, 
and  immediately  showed  me  where  a  magazine  had 
exploded  the  year  before  from  the  same  cause,  and 
had  been  rebuilt  for  a  probable  repetition  of  this 
accident,  which  cost  no  less  than  forty-two  lives. 

At  another  fort  I  asked  to  see  the  powder  used 
in  the  heavy  guns,  and  was  shown  some  powder 
of  Chinese  manufacture.  I  suggested  that  such 
powder  was  not  suitable,  and  might  burst  the  gun. 
The  General  in  command  replied, "  Yes,  it  does;  we 
have  lately  blown  tfie  breech  off  two  12-inch  50-ton 
Krupp  guns,  and  killed  and  wounded  thirty  men." 
Before  this  conversation  I  had  observed  in  a  fort, 
some  distance  off,  two  12-inch  Krupp  guns  fitted 
with  Armstrong  breech  mechanism,  and  on  in- 
quiring  the  reason  had  been  informed  that  the 
breech  had  been  blown  off,  owing  to  the  use  of 
Chinese  powder  at  exercise.  These  guns  had 
been  beautifully  converted  at  the  Shanghai  Arsenal. 

I  spent  much  time  in  viewing  these  forts  in 
difiFerent  parts  of  the  Empire,  and  obtaining  all 
details  concerning  them.  I  have  not  entered  into 
minute  particulars,  as  I  have  in  regard  to  the  ar- 
mies, since  the  forts  can  have  very  little  to  do 
with  the  security  of  British  trade  and  commerce 
in  the  interior  of  the  Empire.  Nor  would  it  be 
courteous  to  those  who  asked  me  to  give  an  opin- 
ion upon  them. 




There  are  seven  arsenals  in  the  Empire  of  China. 
They  are  at  Tientsin,  Shanghai,  Nanking,  Han- 
yang (Hankow),  Foochow,  Canton,  and  Ching-tu. 

I  visited  all  these  arsenals  except  the  one  at 
Ching-tu  in  Szechuan. 

I  made  myself  thoroughly  acquainted  with  the 
budget  allowed  for  each  arsenal,  what  they  were 
manufacturing,  the  number  of  men  employed,  the 
European  countries  from  which  they  had  procured 
their  machinery  and  tools— in  fact  everything  which 
concerned  the  management,  equipment,  and  work 
done  in  these  arsenals.  The  Viceroys,  when  giv- 
ing me  permission  to  visit  them,  asked  me  to  write 
to  them  and  say  what  I  thought  as  to  their  man- 
agement and  efficiency.  I  did  this  and  received 
very  courteous  letters  in  reply. 


This  arsenal  is  under  the  provincial  Govern- 
ment of  the  Viceroy  of  Chihli.  Considerable  ex- 
pense must  have  been  incurred  in  fitting  it  up. 
The  shops  and  sheds  are  excellent.  There  is  an 
hydraulic  press  of  1200  tons,  4  cupolas  which 
could  cast  up  to  20  tons,  and  a  good  supply  of 
furnaces,  Siemens'  process.  There  is  also  a  12- 
ton  traveller,  and  a  driving  engine  of  40-horse 
power,  which  were  built  at  the  arsenal.     While  I 

was  there  another  driving  engine  of   130 -horse 



power  was  in  course  of  construction.  The  tools 
are  very  good,  modern,  and  of  British  or  German 
manufacture,  and  include  everything  necessary 
for  the  repair  and  maintenance  of  a  squadron  and 
also  for  the  construction  of  small  guns.  I  saw 
them  making  four  i6olb.  pressure  circular  boil- 
ers. There  is  enough  spare  room  in  this  arsenal 
to  put  up  plant  to  supply  the  whole  Chinese 
Army.  There  is  deep  water  right  up  to  the 

Mr.  Stewart,  a  Scotsman,  is  in  charge  of  this 
arsenal.  It  is  wonderful  what  he  has  achieved 
under  the  difficulties  of  Chinese  management. 
The  arsenal  is  under  the  administration  of  a 
Chinese  official,  who  receives  150  taels  (about 
;^2i)  a  month.  A  man  at  home  in  a  similar  po- 
sition would  receive  between  £2000  and  ;^3000  a 

I  have  already  referred  to  the  results  attending 
the  under -payment  of  officials  in  the  Chinese 

With  proper  European  management  this  arsenal 
could  turn  out  three  times  the  amount  of  work 
they  do  now  for  the  same  budget. 

In  this  arsenal  there  is  a  mint,  with  two  modem 
machines.  They  can,  if  necessary,  turn  out  30,000 
dollars  a  day ;  when  I  was  there  they  were  making 
1 5,000  dollars  a  day. 

Close  to  the  arsenal  is  a  Government  powder 
factory.  It  has  good  machinery,  and  is  well  and 
carefully  organized  by  a  German. 



I  visited  the  Naval  School  which  is  located  here. 
It  is  in  excellent  order,  and  apparently  very  well 
managed.  There  were  sixty  students,  the  sons  of 
gentlemen,  between  the  ages  of  sixteen  and  twenty. 
They  remain  at  the  school  for  five  years,  and  then 
proceed  to  a  training-ship.  As  the  Chinese  Navy 
is  reduced  to  such  very  small  dimensions,  it  is  dif- 
ficult to  say  what  will  become  of  them  when  they 
have  served  their  time  in  the  training-ship.  All 
these  students  are  taught  English.  The  Peking 
Government  finds  the  budget  (which  is  a  very 
liberal  one)  for  this  college.  The  school  is  under 
Chinese  management. 

Next  door  to  the  Naval  College  there  is  a  school 
for  thirty  Chinese  students  under  Russian  super- 
vision. They  are  learning  to  become  Russian  in- 
terpreters. The  Peking  Government  finds  the 
money  to  maintain  this  school. 

SHANGHAI      - 

This  arsenal  is  under  the  provincial  Govern- 
ment of  the  Viceroy  of  Nanking.  It  is  full  of 
modern  tools  and  machinery,  stores  and  material 
of  every  description.  Everything  is  extremely 
well  found,  and  the  arsenal  is  in  perfect  order.  If 
properly  organized  under  entirely  European  con- 
trol, and  with  some  extra  expenditure,  it  alone 
could  supply  war  material  for  the  whole  of  the 
Naval  and  Military  forces  of  the  Chinese  Empire. 

There  are  two  Englishmen  at  this  arsenal  who  act 



as  advisers  to  the  Chinese  Authorities,  under 
whose  administration  the  arsenal  is  placed.  Mr. 
Bunt  is  in  charge  of  the  whole  of  the  engineering 
works,  and  Mr.  Cornish  is  in  charge  of  the  gun- 
making  and  gun-mounting.  If  these  gentlemen's 
advice  was  always  followed,  a  great  economy  would 
result,  and  the  output  would  be  enormously  in- 
creased. The  Chinese  Authorities  informed  me 
that  they  quite  appreciated  the  invaluable  services 
these  two  Englishmen  have  rendered  to  them. 
There  is  water  transport  to  the  arsenal,  a  small 
dock,  and  a  steam  purchase  6oton  shears.  The 
whole  arsenal  is  tram-lined.  The  tools  and  ma- 
chinery are  of  British  manufacture,  supplied  by  a 
German  firm.  I  found  that  this  practice  was  com- 
mon  in  China,  and  have  seen  the  names  of  foreign 
agents  stamped  on  British  machinery.  As  the 
agent  would  probably  make  from  lo  per  cent,  up- 
ward, I  asked  several  of  the  Chinese  authorities 
why  they  did  not  buy  direct  from  the  British  firms. 
They  explained  that  if  anything  proved  unsatisfac- 
tory with  the  machinery  they  could  easily  obtain 
compensation  from  the  agent  who  was  in  China, 
whereas  if  machinery  were  purchased  direct  from 
England,  if  anything  went  wrong,  compensation 
could  only  be  obtained  after  great  trouble  and  ex- 
pensive lawsuits. 

There  are  facilities  for  casting  up  to  thirty  tons. 
To  show  the  Associated  Chambers  of  Commerce 
what  this  arsenal  is  capable  of,  I  append  the  work 
going  on  when  I  happened  to  be  there. 



There  were  in  hand : 

Two  9.2  guns  to  be  mounted  on  hydro- 
pneumatic  disappearing  carriages. 
Two  9.2  guns  for  garrison  batteries. 
Eight  6"  guns,  q.f. 
Twelve  4.7  guns,  q.f. 
Twenty  1 2-pounders,  q.f. 
Twenty  6-pounders,  q.f. 
Fifty  3-pounders,  Q.F. 

These  guns  were  of  the  latest  Armstrong  pat- 

All  the  steel  for  these  guns  is  made  in  the  arse- 
nal, chiefly  from  native  ore.  The  gun  factory  does 
not  accept  this  steel  until  it  has  passed  through 
the  same  tests  as  the  British  Government  use,  and 
each  gun  is  proved  by  the  tests  the  British  use  be- 
fore it  leaves  the  arsenal. 

I  saw  machinery  for  making  guns  of  every  cal- 
ibre up  to  the  1 2"  50-ton  gun. 

Several  of  these  last-named  guns  have  been 
manufactured  in  the  arsenal,  and  I  saw  some  of 
them  mounted  in  the  forts  I  visited. 

The  rifle  factory  of  this  arsenal  is  turning  out  a 
large  number  of  first-rate  magazine  rifles,  latest 
Mauser  pattern. 

The  cartridge  factory  could  turn  out  millions  of 

cartridges  a  year,  and  there  is  excellent  machinery 

for  making  all  the  cylinders  for  cartridges  for  the 

heavy  guns.     There  is  also  plant  for  casting  and 

turning  projectiles  of  all  calibres.     Many  hundreds 



of  thousands  could  be  made  in  the  course  of  the 

The  powder  factory  is  making  three  kinds  of 
powder — smokeless,  black,  and  brown. 

All  the  coal  used  comes  from  Tongshan,  near 

There  is  a  machine  designed  and  made  here  by 
Mr.  Bunt,  of  a  most  serviceable  and  economic 
character.  By  means  of  a  system  of  clutches  the 
same  engine  can  drive  an  hydraulic  press  2000 
tons  pressure,  or  a  rolling  -  mill  which  can  roll  a 
ten-inch  plate. 

The  arsenal  can  manufacture  steel  guns  of  all 
calibres  both  for  naval  and  military  purposes, 
rifles,  powder,  and  all  classes  of  ammunition. 
Amid  all  this  splendid  work  I  saw  the  steel  bar- 
rels for  the  useless  gingals  being  made,  incredible 
though  it  seems.  Great  economy  could  be  effected 
in  the  administration.  All  leather  equipment  for 
the  armies  of  the  Chinese  Empire  is  bought  in 
Europe.  If  machinery  were  put  up  in  the  Shang- 
hai arsenal,  leather  equipment  could  be  made  there 

In  a  conversation  with  the  director  of  the  arsenal 
(a  Chinese  mandarin),  he  expressed  much  anxiety 
as  to  what  was  going  to  become  of  China  in  the 
near  future.  He  said  that  he  hoped  Great  Britain 
would  assist  China  to  keep  her  integrity.  I  in- 
formed him  that  I  did  not  think  the  British  people 
would  feel  inclined  to  assist  China  unless  China 

showed  some  signs  of  assisting  herself. 



I  also  pointed  out  to  him  the  large  and  useless 
expenditure  of  money  incurred  by  the  manufacture 
of  heavy  artillery,  which  could  have  nothing  to  do 
with  the  maintenance  of  the  integrity  of  China 
under  present  conditions;  whereas  if  the  same 
money  was  devoted  to  equipping  a  serviceable 
army,  it  would  provide  that  security  for  trade  and 
commerce  which  foreign  nations  perceived  did  not 
at  present  exist. 

He  seemed  to  think  there  was  some  force  in 
these  remarks. 


This  arsenal  is  under  the  provincial  government 
of  the  Viceroy  of  the  Liang-kiang  provinces.  It 
is  well  found  in  machinery  and  tools,  principally 
of  British  manufacture,  but  some  German  and  some 
Swiss.  There  is  no  European  adviser  or  foreman. 
The  Chinese  manager  and  officials  did  not  appear 
to  know  what  they  were  making,  or  why  they  were 
making  it.  The  machinery,  which  is  modern,  and 
of  first-class  make,  is  entirely  devoted  to  making 
obsolete  and  useless  war  material.  A  large  num- 
ber of  small  guns  are  being  made  throwing  about 
a  I -lb.  shell.  There  are,  too,  some  5  pr.  guns  be- 
ing made  on  the  Krupp  pattern,  but  without  lim- 
bers, the  guns'  crews  being  supposed  to  carry  the 
ammunition.  I  asked  the  official  in  charge  to 
show  me  how.  He  attempted  to  do  this  with  the 
aid  of  some  coolies,  but  soon  saw  its  impractica- 
bility.    He  had  never  tried  it  before.     Some  of 



the  machinery  here  was  making  one-inch  four-bar- 
rel Nordenfeldts — an  obsolete  arm.  The  greater 
portion  of  the  machinery  was  directed  to  making 
gingals.  The  Chinese  authorities  showed  me  with 
great  delight  that  they  have  fitted  a  Mauser  breech- 
loading  action  to  some  of  these  weapons.  One  of 
these  mandarins  informed  me  that  the  bullet  would 
go  through  four  inches  of  wood,  and  observed  with 
some  pride  and  satisfaction  that  no  nation  had  a 
similar  weapon.  It  was  heart-breaking  to  see  both 
officials  and  workmen  taking  pleasure  and  using 
diligence  in  the  manufacture  of  costly  but  abso- 
lutely useless  war  material.  They  bought  all  their 
steel  from  Shanghai  arsenal. 

HANYANG  (Hankow) 

This  arsenal  is  under  the  provincial  government 
of  the  Viceroy  of  Hupeh  and  Hunan.  It  has  a 
first-rate  modern  plant,  all  by  German  makers.  I 
noticed  a  large  number  of  modern  milling  ma- 
chines. There  is  a  very  good  rifle  factory,  which 
turned  out  about  8000  rifles  a  year,  modern 
Mauser  pattern.  There  is  also  a  large  gun  fac- 
tory which  at  present  turns  out  about  200  of  the 
small  I  pr.  shell  guns  I  have  referred  to  on  pre- 
vious occasions.  The  work  turned  out  in  this 
arsenal  was  another  instance  of  the  terrible  waste 
of  money  in  manufacturing  war  material  of  no  pos- 
sible  value.    I  saw  heavy  and  expensive  machinery 

lying  about  all  over  the  yard,  intended  for  the 



manufacture  of  12"  5oton  guns  of  Krupp  pattern. 
None  of  this  machinery  had  been  set  up.  I  also 
saw  a  large  quantity  of  machinery  for  a  powder- 
mill,  but  this  had  not  been  set  up  either,  and  the 
powder  required  for  making  cartridges  at  this 
arsenal  came  either  from  Germany  or  the  Shanghai 
arsenal.  There  was  a  modern  rifle  cartridge  fac- 
tory, with  an  excellent  machine,  which  could  turn 
out  10,000  cartridges  a  day.  There  was  a  large 
plant  for  making  coke,  but  all  the  coke  required 
for  the  arsenal  was  brought  from  the  Tongshan 
colliery  in  the  north.  Besides  the  machinery  ly- 
ing about  on  the  ground,  not  set  up,  there  were 
plenty  of  machines  idle. 

There  seemed  to  be  no  organization,  and  no  re- 
sponsible foreman.  There  were  some  Germans 
employed  in  this  arsenal,  and  the  condition  of  the 
machines  and  work  turned  out  showed  foreign 
assistance.  As  at  other  arsenals,  if  these  for- 
eigners were  allowed  control  and  management,  the 
waste  of  money  would  be  stopped,  and  the  ma- 
chines would  be  turning  out  war  material  of  some 


This  arsenal  and  dockyard  are  under  the  sole 

responsibility  of  the  Manchu  General,  Tseng  Chee. 

They  have  some  small  cupolas  of  about  two  tons, 

three  tons,  and  five  tons  capability.     There  is  a 

fair  lot  of  machinery  in  this  arsenal  for  making 

engines ;  some  of  it  is  British,  but  most  of  it  is 



French.  There  is  a  good  boiler-shop  with  modern 
fittings,  but  all  the  boilers  required  were  bought 
in  France.  The  casting- shop  was  employed  in 
casting  projectiles  for  heavy  Armstrong  guns, 
M.L.R.  From  the  budget  allowed  for  this  arsenal 
the  waste  appeared  even  greater  than  that  in  other 
arsenals  which  I  visited. 


This  arsenal  is  under  the  provincial  Govern- 
ment of  the  Viceroy  of  Kwangtung  and  Kwangsi. 
An  enormous  mass  of  obsolete  war  material  and 
old  tools  was  lying  about  in  this  yard,  and  thou- 
sands of  cast-iron  spherical  shot  of  all  sizes.  There 
were  some  very  good  modern  tools  of  British 
and  German  make,  but  they  were,  as  in  other 
yards,  employed  in  making  i-pr.  guns  and  gin- 

While  at  this  arsenal  I  was  shown  an  old  pow- 
der-factory,  and  observed  it  had  open  grating  win- 
dows. On  remarking  to  the  mandarin  that  such 
want  of  precaution  was  dangerous,  and  it  was  liable 
to  cause  an  explosion,  he  replied :  "Yes,  that  is  true; 
it  blew  up  two  years  ago,  and  killed  and  wounded 
twenty  men.  We  have  rebuilt  it,  but  do  not  in- 
tend to  use  it  again." 

There  was  a  rifle-factory  here  turning  out  good 

rifles,  Mauser  pattern,  but  the  arsenal  was  turning 

out  two  gingals  for  every  rifle  made.    The  gingals 

manufactured  here  were  the  longest  I  have  seen, 



being  9  feet  8  inches  in  length.  They  made  their 
own  tool  steel  at  this  arsenal. 

There  are  two  small  cupolas  for  casting. 
Though  the  machinery  in  this  arsenal  is  old.  it 
is  in  very  good  order.  In  the  moulding  shop 
they  were  making  moulds  for  ornamental  railings. 

On  the  opposite  side  of  the  river  there  is  a 
powder-factory,  which  had  commenced  work  three 
days  before  I  arrived.  The  factory  is  complete, 
and  built  under  the  most  modern  conditions.  The 
boilers,  engines,  and  shafting  were  made  in  the 
arsenal,  and  looked  first  rate.  The  factory  was 
employed  in  making  German  smokeless  powder. 
They  hoped  to  turn  out  90,000  lbs.  in  the  year. 

There  is  a  cartridge  factory  about  four  miles 
from  this  powder-factory.  The  machinery  is  very 
good  and  all  German.  It  was  employed  in  making 
cartridges,  Mauser  rifles,  and  gingals. 


I  was  unable  to  visit  the  only  other  arsenal,  that 
of  Ching-tu,  as  it  is  far  away  to  the  west,  in  the 
province  of  Szechuan;  but  I  was  informed  that 
this  arsenal  is  under  the  administration  of  the 
Manchu  General,  and  that  the  machinery  is  of 
German  and  British  make,  and  is  employed  turn- 
ing out  rifles  and  cartridges,  Mauser  pattern. 

I  found  in  those  arsenals,  under  entirely  Chi- 
nese management,  that  in  many  cases  neither  the 



foremen  nor  the  workmen  understood  the  feed 
and  speed  gearing  of  their  tools,  and  often  the  tool 
itself  was  not  set  to  take  full  advantage  of  its  cut- 
ting edge.  They  appeared  much  interested  when 
shown  how  to  set  and  gear  their  tools  correctly. 

My  visits  to  the  arsenals  showed  me  that  enor- 
mous sums  of  money  are  being  expended  on  war 
material  that  in  most  cases  is  absolutely  useless. 
Even  the  Shanghai  arsenal,  which  turns  out  work 
second  to  none  in  Europe,  is  making  heavy  guns 
for  men-of-war,  or  forts,  which  can  be  of  no  possi- 
ble utility  to  the  Chinese  Empire  under  present 
conditions.  I  ventured  to  point  this  out  to  the 
Viceroys  with  whom  I  communicated. 

If  all  the  arsenals  but  Shanghai  were  closed  as 
manufactories,  and  only  used  as  depots,  a  very 
large  sum  of  money,  which  is  now  wasted,  would 
be  saved.  This  sum  of  money  would  be  more 
than  ample  to  make  Shanghai  a  manufacturing 
arsenal  capable  of  equipping  an  army  of  200,000 
men  in  an  efficient  manner. 



The  railways  of  China  should  be  divided  under 
three  heads : 

I.  Built 
II.  Building. 
III.  Projected. 

There  is  a  very  wide  difference  between  railways 
built  and  building,  and  those  which  are  only  pro- 
jected, as  in  the  latter  case  some  of  the  ground 
over  which  the  railways  are  supposed  to  pass  has 
not  even  been  surveyed. 

Those  British  lines  not  surveyed  can  scarcely 
be  counted  as  commercial  assets  in  favor  of  Anglo- 
Saxon  trade,  against  foreign  lines  already  in  course 
of  construction. 


The  only  railways  actually  built  at  present  are 
Imperial  Chinese  railways. 

I.  Peking  to  Tientsin,  and  from  Tientsin 
to  Shanhaikwan — 300  miles — under  the  con- 
trol of  his  Excellency  Hu  at  the  time  of  my 



II.  The  other  from  Shanghai  to  Woosung 
— ^about  17  miles — under  control  of  his  Ex- 
cellency Sheng. 

The  Peking-Shanhaikwan  line  is  a  double-track 
line,  well  built  and  maintained,  and  all  details  con- 
nected with  it  are  to  be  found  in  the  chapter  under 
Tongshan,  as  all  materials,  with  the  exception  of 
wheels  and  axles,  are  manufactured  in  that  place. 

The  Shanghai  -  Woosung  Railway  is  a  double 
track,  but  is  not  well  built  or  maintained,  although 
there  is  a  daily  service  of  trains.  I  have  travelled 
by,  and  examined,  both  these  lines. 

The  summary  of  the  railways  in  the  Chinese 

Empire  is  as  follows: 

Built :  All  Chinese 317  miles. 

Building:  Chinese 170  miles. 

Belgian 700  " 

Russian 1,400  '' 

Total 2,270  " 

Projected  (Surveyed,  or  being  surveyed) : 

Chinese 97  " 

German 430  *' 

British 730  ** 

Anglo-American    ....  700  " 

Russo-Chinese 130  '* 

French 420  " 

Total 2,507  ** 

Projected  (Unsurveyed) : 

Anglo-German      ....  600  '' 

British 470  '* 

Total 1,070      " 

Total  projected      .    3,577       " 
u  305 


The  only  railways  building  are: 

I.  The  Lu-Han  or  Peking-Hankow  Rail- 
way, a  trunk  line  of  about  700  miles. 

II.  The  Shanhaikwan-Newchwang  Rail- 
way— 170  miles. 

III.  The  Stretensk-Vladivostock  line,  of 
which  icx>D  miles  is  in  Chinese  territory. 

IV.  The  Russian  -  Manchurian  line,  a 
branch  from  the  Stretensk-Vladivostock  line, 
to  Talienwan  and  Port  Arthur — about  400 

The  Lu'Han  Railway  is  to  run  from  Peking  to 
Hankow,  passing  north  and  south  through  the 
provinces  of  Chihli,  Honan,  and  Hupeh.  A  syn- 
dicate, capitalized  by  Belgian  and  French  finan- 
ciers— of  whom  the  French  subscribed  ;^3,ooo,ooo 
and  the  Belgian  ;^2,cxdo,ooo  —  have  secured  the 
concession.  This  railway  is  supposed  to  have 
great  prospects,  but  it  is  a  matter  of  opinion  as 
to  whether  those  of  the  rival  (projected)  Tientsin- 
Chinkiang  line  may  not  be  better. 

I  visited  the  Lu-Han  line,  both  in  the  North, 
where  it  is  to  join  the  Imperial  Chinese  Railway, 
and  in  the  South,  where  it  had  been  commenced 
at  Hankow. 

In  the  North  there  was  fair  activity ;  but  in  the 
South  work  had  been  suspended  altogether,  al- 
though there  were  about  twelve  miles  of  embank- 
ment ready  for  the  metals. 



As  the  Yangtse  River  is  continually  encroach- 
ing on  the  north  bank,  it  appeared  to  me  that  the 
railway  embankment  was  far  too  close  to  the  river, 
and  probably  a  large  extra  expense  for  bunding 
will  have  to  be  undertaken  by-and-by. 

This  line  is  under  the  control  of  his  Excellency 
Sheng,  and  quite  distinct  from  the  Imperial  rail- 
ways of  North  China. 

The  Government  engineers  of  the  Imperial  rail- 
ways were  borrowed  by  his  Excellency  Sheng  to 
prevent  starting  his  line  with  raw  hands,  as  he  did 
at  the  southern  end — f>.,  from  Hankow. 

The  section  under  the  Imperial  Railway  Au- 
thority is  from  the  big  bridge  over  the  Hun  Ho  at 
Lu  Kao  Chiao  to  the  city  of  Pao  Ting  Fu — eighty 
miles  in  length. 

The  line  is  being  constructed  for  double  track, 
but  only  one  will  be  laid  until  another  is  required. 

Works  have  been  carried  on  very  slowly,  due  to 
his  Excellency  Sheng  using  rails,  etc.,  made  at  his 
works  at  Hanyang,  causing  great  expense  and 

At  date  of  my  visit  forty-five  miles  of  track  had 
been  laid  on  main  line,  and  the  ten  -  mile  branch 
to  the  collieries  and  quarries  west  of  Liu  Li  Ho ; 
the  remainder  awaits  arrival  of  4000  tons  of  rails 
from  England,  which  eventually  had  to  be  ordered 
to  complete  track  to  Pao  Ting  Fu. 

I  was  told  that  traffic  on  the  line  will  be  in- 
considerable until  it  extends  much  farther  south. 
There  has  been  great  delay  in  making  surveys, 



and  the  Belgian  engineers  for  this  purpose  had 
only  just  arrived  when  I  was  there. 

Delay  was  said  to  be  due  to  hitch  in  Belgian 
Loan.  The  Americans  had  the  reversion  of  this 
concession  in  the  event  of  the  Belgian  Syndicate 
not  being  able  to  raise  the  money. 

Traffic  to  Pao  Ting  Fu  will  probably  be  open  in 
May,  1899,  ^ut  ^^^  o^  two  large  bridges  will  not 
be  completed,  as  girders  for  them  may  not  arrive 
before  that  date 

The  Shanhaikwan-Newchwang  Railway  is  an 
extension  of  the  present  Imperial  Chinese  Rail- 
way, and  is  to  run  from  Shanhaikwan  to  Yingkau 
(the  port  of  Newchwang),  via  Kinchow  and  a 
junction  with  the  projected  line  to  Sin  Min 

The  line  is  in  course  of  active  construction  as 
far  as  Kinchow,  and  will  probably  be  open  to  this 
point  in  May,  1899.  A  British  corporation  financed 
this  railway.  There  was  some  misunderstanding 
between  the  British  and  Russian  Governments  as 
to  the  security  for  the  loan.  This  is  fully  referred 
to  in  the  chapter  on  Newchwang. 

This  railway  is  a  very  valuable  one,  owing  to  it 
passing  the  new  Treaty  port  of  Ching  Wang  Too, 
which,  with  some  expenditure  of  money,  can  be 
made  into  a  mercantile  port. 

Further,  this  railway  passes  the  extensive  coal- 
fields of  Nan-Paian,  and  when  it  is  extended  to  Sin 
Min  Thun  it  will  pass  close  to  the  Kwang  Ning 

coal  and  iron  field. 



This  railway  is  also  valuable  for  the  fact  that  it 
will,  when  the  junction  is  made  with  Yingkau  (or 
Newchwang),  be  able  to  carry  the  trade  from  Man- 
churia in  the  winter,  which  is  now  stopped  for  four 
or  five  months  in  the  year,  owing  to  the  port  of 
Newchwang  being  blocked  with  ice.  It  is  generally 
supposed  that  this  is  a  British  railway,  and  a  coun- 
terpoise to  the  Russian  railway  to  the  North.  As  a 
matter  of  fact,  it  is  a  Chinese  railway,  under  Chi- 
nese control,  protection,  and  administration,  but  a 
British  corporation  advanced  the  money  to  build 
it,  being  secured  by  a  lien  on  the  existing  railway 
as  far  as  Shanhaikwan  and  a  guarantee  from  the 
Chinese  Government 

The  Stretensk'  Vladivostock  Railway  is  a  con- 
tinuation of  the  Russian  Trans-Siberian  line, 
and  is  a  concession  to  the  Russian  Govern- 
ment by  the  Chinese,  and  built  with  Russian 

This  is  an  admittedly  strategic  line.  I  was  told 
there  was  great  activity  being  displayed  in  the  com- 
pletion  of  it.  It  is  expected  to  be  finished  in  from 
three  to  four  years.  Some  considerable  difficulties 
are  being  encountered  with  regard  to  the  tunnels 
and  bridges,  but  the  line  is  to  be  in  working  order 
before  these  are  finished.  I  was  informed  that  it 
was  to  be  a  single-track  line. 

The  Russian- Manchurian  Railway  is  a  branch 
of  the  Stretensk- Vladivostock  line,  coming  south 
to  Talienwan  and  Port  Arthur. 

This  is   a  concession  to  the  Russian  Govern- 



ment,  and  is  also  of  Russian  gauge,  finance,  ad- 
ministration, construction,  and  protection. 

It  is  admittedly  a  strategic  railway,  but  will  also 
be  a  valuable  commercial  line,  and  if  the  "  equal- 
opportunity-for-all-nations  "  policy  remains  in  force 
in  the  North,  it  will  be  a  valuable  line  for  the  de- 
velopment of  British  trade  and  commerce,  as  it 
will  open  up  a  very  rich  country  where  the  line  of 
communication  is  bad. 

.  When  I  was  at  Newchwang,  the  Russians  had 
about  1 50  miles  of  the  main  line  from  Talienwan 
to  the  North  ready  for  the  metals,  etc.  The  branch 
line  to  Newchwang  to  the  main  line  was  nearly 
finished.  I  rode  along  it  for  some  considerable 
distance.  The  whole  of  this  railway  is  patrolled 
by  Cossacks.  I  was  informed  that  this  was  to  pre- 
vent the  Chinese  stealing  the  rails. 


The  railways  projected  are  thirteen  in  number, 
and  are  as  follows  : 

I.  The  Taiyuan  Fu-Chengting  Railway — 
130  miles. 

II.  The  Kiao-chow-Yichow-Tsinan  Rail- 
way, a  triangular  line  joining  these  three  places 
— about  430  miles. 

III.  The  Tientsin  -  Chinkiang  Railway — 
about  600  miles. 

IV.  The  Hankow-Canton- Kowloon  Rail- 
way— about  700  miles. 



V.  The  Pekin  Syndicate  Railway — 250 
miles  (not  including  branch  lines). 

VI.  The  Tonquin-Nanning  Fu — 200  miles 
in  Chinese  territory. 

VII.  The  Langson-Nanning — 100  miles. 

VIII.  The  Pakhoi-Nanning  line — 120 

IX.  The  Shanghai-Nanking  Railway  — 
180  miles. 

X.  The  Pu-kon-Hsin-Yang  Railway — 270 


XL  The  Soochow  -  Hangchow  -  Ningpo 
Railway — 200  miles. 

XII.  The  Burmah  Extension  to  Yunnan 
— about  300  miles. 

XIII.  The  extension  of  the  Shanhaikwan 
Railway  from  Kinchow  to  Sin  Min  Thun — 
97  miles. 

Tke  TaiyTian-Fu'Chengting  Railway  is  a  branch 
line  from  Chengting,  on  the  Lu-Han  trunk,  to 
Taiyuan-Fu,  and  this  concession  has  been  granted 
to  the  Russo- Chinese  bank,  who  have  signed  a 
contract  for  its  construction.  I  was  informed  that 
there  was  some  difficulty  as  to  finding  the  money, 
but  I  should  think  this  unlikely,  as  the  Vicomte 
Breteuil,  with  some  engineers,  was  surveying  the 
proposed  route  while  I  was  in  China,  and  I  believe 
he  represents  the  Credit  Lyonnais  in  France. 
There  should  be  no  difficulty  about  the  money  if 
the  survey  is  satisfactory,  as  this  railway,  when 



completed,  will  be  one  of  the  finest  properties  in 

The  KiaO'Chow^Yichow-Tsinan  Railway  is  a 
triangular  railway  in  the  province  of  Shantung, 
and  is  a  concession  to  the  Germans.  This  rail- 
way is  being  surveyed  now.  A  noteworthy  point 
about  it  is  that  the  Germans  have  determined  that 
they  shall  have  preferential  rights,  as  far  as  railway 
enterprise  goes,  in  the  province  of  Shantung,  and 
that  both  Great  Britain  and  China  have  agreed  to 
this  demand. 

The  Tientsin  Chinkiang  Railway  runs  north  to 
south  to  the  east  of  the  Lu-Han,  and  commer- 
cially is  expected  to  pay  better,  as  it  runs  nearer 
the  coast.  It  is  an  Anglo-German  line,  and  the 
contract  has  been  signed,  but  no  survey  has  yet 
been  made. 

The  Hankow  •  Canton  Railway  runs  from  the 
Yangtse  to  Canton,  where  it  is  to  join  the  Kow- 
loon- Canton  railway.  It  is  an  Anglo-American 
concession,  and  an  extremely  valuable  one,  as  it 
passes  through  some  very  rich  provinces,  particu- 
larly the  province  of  Hunan,  which  as  yet  is  en- 
tirely closed  to  the  foreigner. 

This  is  supposed  to  be  the  second  richest  prov- 
ince in  the  whole  of  China.  The  signing  of  this 
contract  was  eminently  satisfactory,  as  it  brought 
an  American  and  British  syndicate  together.  The 
whole  line  is  700  miles  in  length,  but  of  this  600 
miles  originally  belonged  to  the  American  syndi- 



The  Pekin  Syndicate  Railway  is  a  railway  to 
give  an  outlet  for  the  enormous  deposits  of  coal, 
iron,  and  petroleum  which  this  British  syndicate 
has  the  right  of  working.  From  all  I  could  gather 
in  China,  the  coal  and  iron  field,  if  not  the  largest, 
is  one  of  the  largest  mineral  fields  in  the  world. 
It  is  in  the  province  of  Shansi.  This  syndicate 
has  a  most  valuable  concession,  as  it  also  has  the 
right  to  construct  branch  railways  to  connect  with 
main  lines,  or  with  water  navigation,  to  facilitate 
the  transport  of  the  Shansi  coal.  The  nearest 
head  of  navigation  giving  access  to  the  Yangtse 
is  Siangyang,  on  the  Han  river,  about  250  miles 
from  the  coal-field.  The  railway  route  is  unsur- 
veyed  at  present,  but  quite  lately  a  large  number 
of  the  best  engineers  procurable  have  gone  out 
to  report  fully,  not  only  on  the  railway  route,  but 
upon  the  coal  area  also. 

The  Tonquifi'Nanning'Fu,  the  Langson-Nan- 
ningy  and  Pakhoi-Nanning  railways  are  all  in- 
timately connected.  The  French  contracts  for 
these  railways  have  been  signed,  and  some  of  the 
routes  surveyed.  I  heard  that  the  French  en- 
gineers had  made  themselves  and  their  Annamite 
escort  most  unpopular  by  their  rigorous  treatment 
of  the  natives. 

Among  the  mercantile  communities  in  the  south, 
the  idea  was  freely  expressed  that  none  of  these 
lines  would  be  built,  anyhow  with  French  capital, 
as  the  French  commercial  communities  have  de- 
clared that  such  lines  would  not  divert  trade  for 



French  benefit,  but  if  built  would  develop  British 
trade  immensely. 

The  Shanghai' Nanking  Railway  is  a  British 
railway  projected  to  connect  Nanking  with  the 
coast.  If  this  railway  is  constructed  it  will  be  a 
most  valuable  property.  The  contract  has  been 
signed,  and  part  of  the  route  has  been  surveyed. 

The  Pu'kon-Hsin-Yang Railway  is  a  projected 
branch  from  the  Shanghai-Nanking  Railway  from 
Pukon  to  Hsin-Yang  in  Honan,  a  distance  of  270 
miles.  The  right  has  merely  been  conceded  to  a 
British  firm,  but  the  contract  has  not  been  signed, 
nor  has  there  been  any  survey.  , 

The  SoochoW'Hanchow-Ningpo  Railway. — The 
same  British  firm  have  the  right  to  construct  this 
railway.  It  should  be  a  very  paying  line,  if  con- 
structed, as  it  passes  through  very  populous  dis- 
tricts. The  contract  has  not  been  signed,  nor  has 
any  part  of  it  been  surveyed. 

The  Burmah  Extension  Railway  is  a  projected 
British  line  to  connect  the  Burmese  Railway,  when 
it  reaches  the  frontier  of  China,  with  the  capital  of 
Yunnan.  The  route  is  supposed  to  be  quite  im- 
practicable, but  this  theory  is  unreliable  till  it  has 
been  practically  tested  by  those  sent  to  survey  the 
country  through  which  the  line  is  to  pass.  From 
what  I  could  gather,  I  believe  that  this  line  will  be 
found  practicable. 

The  Shanhaikwan  Extension  is  a  project  on  the 
part  of  the  Imperial  Chinese  Railway  authorities 
to  extend  the  line  at  present  being  built  in  two 



directions,  one  from  the  proposed  junction,  lo 
miles  south  of  Kwangning,  to  Sin  Min  Thun,  67 
miles,  and  from  the  main  line  to  the  Nan  Paian 
collieries,  30  miles.  This  is  a  Chinese  railway 
under  Chinese  control  and  administration.  It  is 
managed  by  Mr.  Kinder,  a  British  subject,  and  is 
to  be  financed  by  a  British  Corporation. 

The  line  is  a  particularly  valuable  one,  as  it 
passes  near  the  rich  coal  area  of  Kwan  Ning,  and 
has  the  undoubted  advantage  of  being  near  the 
sea.  It  also,  under  present  conditions,  will  be  able 
to  tap  the  great  trade  of  Manchuria. 

It  was  brought  to  my  notice  while  in  China  that 
if  railways  were  built  connecting  the  following 
places  a  great  development  of  trade  might  be  ex- 

It  would  appear  that  these  routes  should  be 

1.  A  railway  between  Wuchow  and  Chung- 
king, via  Kweiking  and  Kweiyang,  the  capi- 
tals  of  Kwangsi  and  Kweichow  respectively. 
If  this  railway  could  be  built,  goods  which 
now  take  three  months  or  more  getting  to 
Hong  Kong  could  be  delivered  in  four 

2.  A  railway  between  Nanning-Fu  and 
Chang- Sha.  It  would  open  up  a  very  rich 
country  if  on  survey  this  line  was  found  to  be 

3.  A  railway  between  Chungking  and 
Ching-tu  in  Szechuan.     I  was  informed  that 



this  railway  would  be  certain  to  pay  if  found 
to  be  practicable. 

In  addition  to  these  a  railway  has  been 
suggested  through  the  Chekiang  and  Fukien 
provinces,  along  the  coast,  from  Hangchow  to 
Canton.  This  railway  has  been  applied  for 
by  a  British  syndicate. 

The  gauge  for  all  railways  built  in  China  is  to 
be  4  feet  8^  inches,  with  the  exception  of  the  Rus- 
sian-Manchurian  Railway,  which  is  5  feet. 

It  is  important  that  railways  built  in  China 
should  be  built  to  suit  the  people,  the  climate,  and 
the  country. 

The  costly  methods  in  use  in  Europe  and  the 
rough  light  structures  on  pioneer  lines  in  the 
United  States  are  both  equally  inapplicable. 
The  construction  needed  is  somewhere  between 
these  two  extremes,  and  more  dependence  must 
be  placed  on  the  talents  and  experience  of  those 
on  the  spot  than  in  any  account  of  high -class 
opinion  or  data  obtainable  from  elsewhere. 

Tariffs  must  be  kept  low,  or  advantage  will  not 
be  taken  of  the  railways  for  goods  traffic,  and  if  the 
fares  are  not  low  the  Chinese  will  prefer  to  walk. 

From  inquiries  I  made  I  should  think  that,  un- 
less killed  by  initial  extravagance,  most  lines  in 
China  can  be  made  to  pay  well.  The  whole  de- 
tails connected  with  the  expenses  of  running  a  rail- 
way in  China  are  to  be  found  in  the  chapter  head- 
ed "  Tongshan." 



If  the  "Open  Door"  policy  is  maintained 
throughout  China,  the  more  countries  who  em- 
ploy  their  capital  and  energy  in  making  railways, 
the  better  it  will  be  for  British  trade;  but  in  or- 
der  to  secure  the  "  Open  Door  "  policy,  it  may  be 
that  we  shall  have  to  concede  to  other  countries 
preferential  rights,  or  spheres  of  interest,  as  far  as 
railway  enterprise  is  concerned.  This  we  have  al- 
ready done  with  regard  to  Germany  in  Shantung 
and  Russia  in  Manchuria,  and  the  question  arises, 
What  is  our  position  in  the  Yangtse  Valley,  where 
other  Powers  possess  railway  concessions  ?  In  my 
humble  opinion,  it  would  be  better  for  Anglo-Saxon 
trade  and  commerce  if  we  keep  clear  of  "  Spheres 
of  Influence  "  in  every  shape  and  form,  and  adhere 
firmly  to  the  "  Open  Door  and  Equal  Opportu- 
nity "  policy. 



The  Waterways  of  China  are  the  natural  lines 
of  communication  throughout  this  great  Empire. 
There  are  few  places  of  importance  which  could 
not  be  reached  by  water  transport.  The  country 
is  irrigated  by  some  of  the  most  splendid  rivers  in 
the  world,  and  intersected  by  a  system  of  canals 
which  is  six  hundred  years  old.  Like  everything 
else  in  China,  however,  the  wonderfully  complete 
system  of  water  communication  is  falling  into  de- 
cay. The  Grand  Canal,  one  of  the  finest  pieces 
of  engineering  in  the  world,  and  which  connects 
North  China  with  the  Yangtse  Valley,  is  abso- 
lutely dry  in  some  places;  but  while  I  was  at 
Hankow  one  of  the  Pekin  Syndicate  engineers 
arrived  from  the  North,  having  travelled  nearly 
the  whole  distance  by  the  Grand  Canal,  and  he 
reported  that  it  is  still  navigable  for  many  hun- 
dreds of  miles. 

Large  sums  of  money  are  set  apart  for  the 
maintenance  and  repair  of  the  waterways,  but 
very  little  of  it  is  applied  for  its  legitimate  pur- 
pose.    The  banks  are  falling  in  through  want  of 



bunding  and  proper  care.  The  general  silting  up 
of  so  many  of  the  important  waterways  of  China 
causes  both  delay  and  inconvenience  to  trade. 

Whatever  improvements  are  made  in  the  direc- 
tion of  increasing  the  facilities  of  transport  by 
railways,  the  waterways  should  not  be  neglected. 
They  are  not  only  the  principal  and  natural  line 
of  communication,  but  the  cheapest  mode  of  trans- 
port, and  would  materially  assist  the  extension  of 
foreign  trade  if  kept  in  efficient  order. 

The  principal  river  in  China  is  the  Yangtse 
River.  This  magnificent  river  is  second  only  to 
one  river  in  the  world — the  mighty  Amazon.  Its 
broad  stream,  yx>o  to  3500  miles  in  length,  taps 
the  heart  of  the  Chinese  Empire  and  passes 
through  its  richest  provinces,  its  basin  extending 
over  an  area  of  700,000  to  750,000  square  miles. 
It  is  navigable  in  the  flood  season  (the  summer) 
for  ocean-going  steamers  for  a  distance  of  680 
miles  from  the  sea — viz.,  to  Hankow,  where  the 
Han  River  flows  into  it.  Beyond  Hankow  navi- 
gation becomes  difficult,  but  not  dangerous,  and 
ordinary  steamboats  can  go  up  to  Ichang,  in  the 
province  of  Hupeh,  a  distance  of  370  miles  far- 
ther. It  will  thus  be  seen  that  this  mighty  artery 
is  navigable  for  steamers  for  1050  miles  from  the 
sea,  and  for  another  440  miles— viz.,  to  Chung- 
king— it  is  at  present  navigated  by  large  junks; 
the  rapids  above  Ichang  being  impossible  for  any 
but  shallow-draught  steamers  to  pass.  A  steam- 
launch  has,  however,  succeeded  in  getting  up  there; 



Mr.  Archibald  Little,  a  British  resident  in  China, 
being  the  pioneer  of  steam  and  civilization  in 
the  Yangtse  gorges.  Small  junks  go  as  far  as 
Pingshan,  1 750  miles  from  the  mouth,  and  small 
native  boats,  I  was  told,  go  200  miles  higher  still, 
so  that  for  nearly  2000  miles  this  magnificent 
river  is  a  highway  of  trade. 

I  ascended  the  Yangtse  from  Shanghai  as  far 
as  Hankow,  touching  at  the  various  Treaty  ports 
on  the  way.  The  shortness  of  the  time  at  my  dis- 
posal rendered  it  impossible  for  me  to  proceed 
beyond  Hankow,  but  I  made  full  inquiries  on  the 
subject  of  navigation  and  trade  above  this  point* 
One  of  the  British  pilots  navigating  the  river  be- 
tween Hankow  and  Ichang  gave  me  the  following 
particulars  of  this  part,  with  the  names  of  all  inter- 
mediate stations  and  their  distances : 



Distance  from  Hankow 


Keun  Kan 7  miles. 

Kwa-ma-Cbiu 19     " 

Mei-tan-cbu 26    " 

Paechu 44    " 

Han-chu-kwang 57     " 

Lung-kau 75     ** 

Singti 93     " 

Moopachin  Rocks      .     .     .    .  no    " 

Kinhokow 115 

I,  320 




Just  below  here  Yobchau  is  situated.  Practically 
it  is  at  the  mouth  of  the  Tung  Ting  Lake.  Yobchau 
has  recently  been  opened. 

Pagoda  Village 128  miles. 

Sze-pa-kan 136     " 

A  bad  place,  with  shifting  sands.  Plenty  of  water 
in  summer  —  up  to  16  feet;  in  winter  lowest  water 
7  feet  to  8  feet. 

Fanchi 146  miles. 

Low  Point    .......     157     " 

A  bad  place,  with  shifting  sands.  The  channel  is 
always  changing.  In  winter  there  is  6  feet  to  7  feet 
of  water. 

Shan-chi-wan 167  miles. 

Just  below  here  is  Hia-chi-wan,  where  there  is  a 
good  anchorage.  It  would  be  a  good  place  for  a 

Sin-ho-kan 184  miles. 

Liu-ki'kan 193     '' 

Tian-hien-kan 205     " 

Here  is  the  "  Salimis "  bar,  6  feet  to  7  feet  of 
water ;  but  the  channels  change  sometimes  daily. 

Sunday  Island 248  miles. 

A  very  bad  place  indeed.  Sand  always  shifting ; 
never  the  same  channel. 

Ho-hia 261  miles. 

Tuh-kechow 274    " 

Shasze 303     " 

A  bad  place ;  ever  shifting  channel ;  6  feet  to  8 
feet  of  water. 

Broad  Point 313  miles. 

Tung-Tsze 332     ** 

Sometimes  bad ;  shifting  sand ;  6  feet  to  8  feet  of 

Grand  Point 333  miles. 

Chikiang 338    " 

E"too 350    " 

X  321 


Rocks  and  shingle  bottom ;  buoyed  in  winter. 
Tiger  Teeth  .......    360  miles. 

Ichang 370    " 

There  are  no  channel  lights  at  night.  The 
three  steamship  companies  —  Messrs.  Jardine  & 
Matheson,  Messrs.  Butterfield  &  Swire,  and  the 
China  Merchant  Company  —  keep  permanent 
buoys  at  E-too;  but  otherwise  each  company 
sound  every  time  their  steamers  go  up  or  down, 
and  then  place  buoys.  The  sand  is  always  shift- 
ing, and  in  many  places  the  bars  change  daily. 
Going  up  the  river  there  may  be  seven  or  eight 
feet  of  water,  coming  down  there  may  not  be  four 
feet  in  the  same  place.  In  summer  any  steamer 
drawing  sixteen  or  even  eighteen  feet  could  get 
to  Ichang,  but  in  winter  no  steamer  can  pass  up 
drawing  more  than  six  feet.  There  is  plenty  of 
water  at  Ichang  for  a  big  ship  to  lie,  if  once  she 
gets  there. 

The  famous  gorges  or  rapids  of  the  Yangtse  lie 
between  Ichang  and  Kweichow,  a  distance  of 
about  146  miles.  Although  I  had  no  time  to  visit 
them  personally,  I  obtained  all  the  information 
possible  about  them,  not  only  from  foreigners  who 
have  constantly  passed  through  them,  but  also 
from  the  Chinese  pilots  and  captains  who  are  al- 
ways traversing  them  in  junks. 

From  what  I  could  learn,  they  are  in  no  way  so 

difficult  or  so  dangerous  for  steamer  traffic  as  those 

on  the  Nile,  and  before  many  years  are  over  the 



energy  and  enterprise  of  British  merchants  should 
have  cargo -steamers  proceeding  through  these 
rapids.     At  any  rate  it  ought  to  be  tried, 

I  could  not  find  that  any  British  company  in- 
tended to  start  steamers  to  run  through  the  gorges, 
but  I  was  informed  that  a  German  company  was 
getting  capital  together  and  making  preparations 
for  this  object  Although  the  question  is  one  of 
open  competition,  both  for  the  sake  of  Anglo-Saxon 
trade  and  prestige  it  is  to  be  hoped  that  the  first 
cargo-steamer  to  navigate  these  rapids  will  fly  the 
British  flag. 

I  went  on  board  several  of  the  junks  used  for 
the  traffic  through  the  gorges ;  they  are  beautifully 
built,  of  very  superior  workmanship,  and  totally 
unlike  any  other  junks  in  China.  Near  the  water- 
line  they  are  cigar-shaped,  with  very  high  coam- 
ings on  the  upper  deck,  and  every  arrangement 
made  for  battening  them  down  securely.  These 
junks  carry  between  fifty  and  sixty  tons  of  cargo. 
They  are  very  suitable  for  the  export  trade  of  Sze- 
chuan,  as  they  can  get  down  the  rapids  without 
much  difficulty  or  danger.  But  steamers  are  ur- 
gently needed  for  the  import  trade,  owing  to  the 
risk  and  delay  incurred  in  getting  these  junks  up 
the  stream  against  the  rapids. 

The  chief  difficulties  to  be  contended  with  are 
the  extraordinary  bends  that  the  river  takes,  the 
speed  of  the  stream,  which,  as  far  as  I  could  make 
out,  was  from  eight  to  nine  knots,  and  the  slope 
of  the  water  in  some  of  the  reaches  sometimes 



amounting  to  a  fall  of  from  5  to  6  feet  in  800 

I  have  the  daily  rise  and  fall  of  the  river  at 
Ichang  for  1897.  The  greatest  rise  in  twenty- 
four  hours  was  132  inches;  the  greatest  fall  in 
twenty-four  hours  was  59  inches.  These  were  on 
May  6th  and  8th  respectively. 

I  could  not  discover  that  these  rapids  are  re- 
garded as  dangerous  by  those  who  are  accustomed 
to  them,  provided  proper  care  is  taken.  Junks  are 
occasionally  stove  in,  but  as  they  are  built  with 
water-tight  compartments  they  are  seldom  lost. 
The  crews  occasionally  have  to  swim,  but  the 
loss  of  life  is  very  small,  as  sanpans  are  used 
as  life-boats  in  all  the  dangerous  places.  Dam- 
age to  cargo  is  the  most  frequent  cause  of  com- 

I  firmly  believe  that  H.M.S.  Woodcock  could 
proceed  up  and  down  the  rapids  with  perfect  safety 
if  carefully  handled. 

It  might  be  possible  to  use  these  gorges  for  ob- 
taining water  power,  as  at  Niagara.  Electric  plant 
might  be  established  here,  and  manufactories  for 
the  treatment  of  tobacco  and  other  products  of  this 
district  could  be  started.  The  water  power  could 
also  be  used  for  hauling  up  boats  on  a  system 
similar  to  that  which  I  have  described  as  being  in 
use  at  Lake  Biwa  in  Japan. 

In  my  opinion,  with  a  certain   expenditure  of 

money  and  the  assistance  of  the  brain  and  energy 

of  the  civil  engineer,  these  rapids  could  easily  be 



rendered  safe  for  cargo-steamers  with  a  speed  of 
not  less  than  twelve  knots. 

So  far  as  I  could  gather  from  expert  opinion,  at 
no  place  throughout  the  whole  of  the  gorges  do 
any  great  engineering  difficulties  exist  which  could 
not  be  overcome.  A  British  engineer  who  quite 
recently  passed  through  this  district  informed  me 
that  he  estimated  that  the  New  Rapid  could  be 
permanently  improved  at  a  cost  of  ;^  12,000.  He 
also  estimated  that  an  expenditure  of  ;^50,ooo 
would  be  more  than  enough  to  clear  the  rapids 
suffiiciently  to  enable  steamers  to  pass  through  the 
gorges  at  any  time  of  the  year.  The  sum  seems 
ridiculous  when  compared  with  the  advantages  to 
be  obtained  by  opening  up  steamer  traffic  with  the 
rich  provinces  of  the  country  beyond. 

The  Chinese  authorities  are  reported  to  have 
allocated  150,000  taels  (about  ;^2 1,000)  in  trying 
to  render  the  New  Rapid  safe  for  navigation. 

Up  till  now  they  have  not  succeeded  in  doing 
much  good,  and  the  general  belief  is  that  most  of 
the  funds  remained  in  the  pockets  of  one  of  the 
local  officials. 

It  was  brought  to  my  knowledge  that  just  about 
the  same  time  as  I  arrived  in  Hankow  (November, 
1898)  the  French  were  very  active  surveying  for  a 
railway  in  Szechuan,  and  their  surveyors  have 
openly  declared  that  if  the  "  Spheres  of  Influence  " 
policy  is  adopted  they  would  certainly  consider 
Szechuan  (one  of  the  Yangtse  provinces)  as  with- 
in their  Sphere  of  Influence.     If  this  claim  w£re 



admitted,  the  British  "  Sphere  of  Influence  "  might 
end  at  the  Tung  Ting  Lake,  but  certainly  would 
do  so  at  Ichang. 

The  French  base  their  claim  on  the  fact  that 
the  Chinese  themselves  declare  that  the  Yangtse 
River  proper  flows  out  of  the  Tung  Ting  Lake, 
and  that  the  Upper  Yangtse  is  only  a  tributary. 
As  a  matter  of  fact,  the  Chinese  hardly  ever  call 
the  Yangtse  by  the  name  by  which  the  foreigner 
knows  it  Up  to  the  Tung  Ting  Lake  they  gen- 
erally call  it  the  Taking,  or  Great  River ;  from  the 
Tung  Ting  Lake  to  the  westward,  generally  called 
by  the  foreigner  the  Upper  Yangtse,  is  to  the 
Chinese  known  by  the  name  of  the  Chingchow 

This  is  a  very  important  point:  it  adds  one  more 
to  the  international  complications  likely  to  lead  to 
war  if  the  "  Sphere  of  Influence  "  policy  is  ever 
adopted  in  China.  Accounts  of  the  progress  of 
the  French  survey  party  on  the  Uppej  Yangtse 
which  reached  me  were  not  satisfactory.  They 
appeared  to  have  failed  to  propitiate  the  Chinese, 
and  to  have  caused  a  good  deal  of  ill-feeling  against 
foreigners  by  their  procedure.  I  submit  to  the 
Associated  Chambers  that  British  interests  would 
be  well  served  by  keeping  this  part  of  China  under 
British  observation. 

The  British  Government  had  just  completed  put- 
ting together  a  shallow-draught  gunboat — H.M.S. 
Woodcock  —  and  it  was   placed   on   the  Yangtse 

River  while  I  was  in  China.     This  boat  was  sent 



out  in  pieces  from  England,  and  is  built  on  the 
model  of  the  shallow-draught  gun-boats  used  lately 
with  such  great  success  on  the  Nile,  and  which 
draw  less  than  two  feet  of  water. 

As  will  be  seen  by  the  account  of  my  interviews 
with  the  Viceroys  of  Nanking  and  Wuchang,  the 
Chinese  authorities  would  warmly  welcome  British 
gun-boats  on  the  waterways  in  order  to  assist  the 
provincial  Governments  in  securing  respect  and 
security  for  the  foreigner. 

The  establishment  of  landing-places  and  coal- 
hulks  (particularly  the  former)  on  the  Yangtse  and 
other  rivers  is  very  desirable.  Hulks  for  bonding 
goods  at  the  Treaty  Ports  on  the  rivers  might  assist 
the  trader. 

There  is  a  good  deal  of  passenger  traffic  on  the 
Yangtse  as  well  as  cargo.  Accommodation  is  pro- 
vided for  European  passengers,  but  the  majority  of 
the  passengers  are  Chinese.  Fares  are  very  low, 
and  great  numbers  of  the  latter  are  carried.  I 
inspected  the  Chinese  accommodation  on  the  river 
steamers  on  my  passage  up  to  Hankow.  The 
steamers  carry  a  large  Chinese  crew,  and,  in  ad- 
dition, a  number  of  men  under  the  supercargo. 
The  commander  and  officers  are  all  Europeans; 
both  a  Chinese  and  European  pilot  are  carried. 
The  pay  of  the  European  officers  is  good,  and  the 
life  and  work  not  unpleasant  in  a  healthy  climate, 
although  malaria  is  rife  on  shore  during  some  parts 
of  the  year. 

It  is  perfectly  possible  to  get  from  Shanghai 


^  I 


(which  is  situated  on  the  Wangpoo,  a  tributary 
which  enters  the  Yangtse  River  near  its  mouth)  to 
Chinkiang  through  a  creek  to  Soochow,  and  from 
Soochow,  via  the  Grand  Canal,  without  touching 
the  Yangtse  except  for  a  distance  of  5  miles.  This 
was  done  by  a  British  gentleman  in  June,  1898, 
in  a  steam-launch  drawing  3  feet  of  water,  I 
mention  it  to  show  how  the  whole  country  is 
traversed  by  waterways  which  only  require  proper 
attention  to  make  them  valuable  and  cheap  channels 
for  trade  into  the  interior.  I  had  ocular  proof  of 
the  advisability  of  placing  small  tug-boats  on  the 
river  in  this  locality  in  order  to  hasten  the  de- 
parture of  junks  with  cargo  for  the  canal.  They 
usually  have  to  wait  for  a  fair  wind.  Sometimes 
they  wait  for  days. 


The  Grand  Canal,  the  longest  artificial  water- 
way in  the  world,  starts  from  Tientsin  and  runs 
south  from  there  to  Hangchow,  a  distance  of 
about  600  miles.  It  crosses  numerous  rivers  in  its 
course,  including  the  Yellow  River  and  the  Yangtse. 

While  at  Chinkiang  my  attention  was  drawn  to 

the  Grand  Canal  on  the  south  side  of  the  Yangtse, 

and  I  saw  that  there  was  no  water  in  it;  pigs 

were  disporting  themselves  in  the  bed,  which  was 

actually  dry.     It  was  silted  up  where  it  should 

join  the  Yangtse,  simply  from  want  of  care.    The 

canal  is  in  this  deplorable  state  for  some  eight  or 



nine  miles  south  of  the  Yangtse  for  about  four 
months  out  of  the  year,  during  which  time  it  has 
to  be  entered  some  miles  southward  by  means  of 
other  branches. 

This  illustrates  one  of  the  many  thousand  cases 
where  the  civil  engineer  is  wanted  in  China. 

If  this  waterway  was  dredged  and  made  effi- 
cient, it  would  add  largely  to  the  commerce  of 
Chinkiang  and  improve  the  lines  of  communica- 
tion with  the  interior  of  the  Empire.  This  ques- 
tion is  referred  to  in  the  memorandum  of  the 
Chinkiang  Chamber  of  Commerce.  Most  of  the 
large  sums  of  money  given  for  the  preservation  of 
this  canal  are  regularly  peculated  by  the  officials. 
The  mandarin  who  is  paid  a  large  sum  of  money 
annually  to  keep  the  canal  clear  has  never  been 
south  of  the  Yangtse  River. 

In  the  north  I  was  informed  that  the  Grand 
Canal  was  blocked  for  miles  owing  to  the  periodi- 
cal floods  of  the  Yellow  River. 

It  would  be  impossible  to  over-estimate  the  im- 
portance of  this  canal  to  trade  and  commerce  if 
opened  up  and  rendered  navigable. 


The  next  most  important  river  to  trade  in  China 
is  the  West  River,  which  enters  the  sea  near  Can- 
ton, and  which  flows  through  the  fertile  provinces 
of  Southern  China,  where  almost  every  inch  of 

soil  is  cultivated. 



There  is  a  large  and  growing  British  trade  be- 
tween these  provinces  and  Hong  Kong,  and  sta- 
tistical Tables  showing  the  details  of  this  trade 
are  enclosed  under  "  Hong  Kong." 

To  merely  take  the  figures  given  without  any 
explanation  would  be  to  convey  to  those  unac- 
quainted with  the  conditions  of  the  carrying  trade 
of  the  West  River  an  erroneous  idea  of  the  pro- 
portion which  the  British  possess.  As  a  matter 
of  fact,  with  the  exception  of  one  small  steamer  of 
about  ICO  tons,  flying  the  American  flag,  the  whole 
of  the  carrying  trade  is  either  British  or  Chinese. 
With  the  inland  waters  open  and  equality  of  treat- 
ment accorded  to  all,  a  vast  increase  can  be  looked 
for,  carrying  with  it  an  increase  of  the  proportion  of 
British  vessels  which  will  find  employment ;  none 
of  which  would  be  allowed  to  compete  if  the 
French,  under  a  "  Spheres  of  Influence  "  policy, 
were  allowed  to  claim  the  Two  Kwang  Provinces 
as  within  their  sphere.  The  trade  itself  can  be 
divided  into  foreign  imports;  exports  to  Hong 
Kong  destined  to  foreign  countries;  domestic 
trade — ue.,  carriage  of  Chinese  goods  from  one  port 
in  China  to  another ;  and  exports  of  Chinese  goods 
to  Hong  Kong,  whence  they  come  back  into  China, 
the  object  of  this  being  to  qualify  such  goods  to 
go  inland  under  transit  pass. 

A  representative  of  Messrs.  Jardine  &  Matheson 
had  occasion  last  year  to  visit  Fatsban,  and  on 
discussing  various  questions  with  the  merchants 
at  that  place  discovered  that  large  quantities  of 



goods  manufactured  there  and  destined  for  Nan- 
ning-Fu  still  followed  the  old  route  z//^  Pakhoi,  into 
which  they  had  been  forced,  as  it  was  the  line  of 
least  resistance  as  far  as  likin  was  concerned. 
Cargo  via  Pakhoi  route  costs  $347  per  picul  to 
land  at  Nanning-Fu — likin,  freight,  coolie  hire  over- 
land, etc.,  all  included.  To  send  it  to  Hong  Kong, 
bring  it  back  into  China,  and  ^end  it  up  to  Nan- 
ning-Fu under  transit  pass,  entails  the  payment  to 
the  I.M.  Customs  of  two  full  duties  and  a  half 
(that  is,  one  duty  on  export,  one  on  its  return  for 
imports,  and  half  for  transit  dues),  in  all  $2.44, 
which  leaves  a  balance  quite  ample  to  cover 
freight,  etc.,  by  the  West  River  route.  On  being 
asked  why,  if  they  were  determined  to  dodge  pro- 
vincial taxation,  they  did  not  choose  this  way  of 
doing  it,  which  would  be  quicker,  more  direct,  and 
presenting  the  additional  advantage  of  gaining  the 
cover  of  a  transit  pass  to  their  goods,  they  quickly 
grasped  the  idea ;  the  result  has  been  that  increas- 
ing quantities  of  cargo  now  go  via  Hong  Kong.  In 
fact,  nearly  the  whole  of  the  exports,  and  a  cor- 
responding proportion  of  the  imports  which  ap- 
pear in  the  Customs  Returns  for  the  Port  of 
Samshui,  are  due  to  this  cause.  The  carriers  are : 
First,  those  engaged  in  the  direct  trade  to  Hong 
Kong,  picking  up  such  domestic  trade  as  they  can 
en  route;  second,  those  engaged  in  the  domestic 
trade  purely,  such  as  from  Canton  to  Wuchow. 
The  first  consist  of  British  steamers,  British  sail- 
ing lorchas,or  junks,  one  small  American  steamer, 



and  a  number  of  junks  flying  no  flag  at  all ;  the 
latter  towed  by  Chinese  steam-launches.  The 
second  consist  of  British  steamers,  one  or  two 
Chinese  launches,  and  a  large  number  of  specially 
constructed  Chinese  junks,  towed  by  Chinese 
launches;  these  latter  are  run  by  semi-official 
Chinese  companies,  in  which  likin  officials  are  in- 

The  junks  referred  to  above  as  flying  no  flag  at 
all  require  some  explanation.  At  the  opening  of 
the  West  River  the  Customs,  foreseeing  the  ne- 
cessity of  providing  for  craft  of  this  nature,  made 
the  following  rule  : 

Section  II. — Clause  i. 

"Foreign-owned  steam-vessels  and  foreign- 
owned  vessels  not  being  steamers,  if  not  hold- 
ing national  or  colonial  registers,  are  permit- 
ted to  trade  on  the  West  River  under  the 
West  River  certificate. 

This  regulation  was  promptly  taken  advantage 
of  by  the  Hong  Kong  Chinese,  who  saw  in  it  a 
means  to  avoid  both  the  likin  officials  under  which 
their  craft  would  properly  come  under  the  Chi- 
nese flag,  and  the  responsibility  and  expense 
which  attach  to  the  flying  of  a  foreign  flag.  The 
West  River  certificate  costs  $ioo  per  annum,  paid 
to  I.M.  Customs.  The  system  they  adopt  is  as 
follows : 

Chinese  capitalists  engage  some  foreigner,  hith- 



erto  generally  a  British  subject,  to  assume  nominal 
ownership  of  certain  junks  which  they  intend  to 
run,  and  usually  of  the  bulk  of  the  cargo  carried 
by  such  junks.  This  foreigner  communicates  to 
the  Consul  and  Customs  at  the  port  or  ports  the 
fact  that  he  is  the  owner  of  these  vessels ;  that  so- 
and-so — naming  one  of  the  Chinese  capitalists — 
will  act  as  his  agent ;  and  he  also,  as  a  rule,  allows 
his  name  to  be  placed  on  a  sign-board  outside  the 
Chinese  Hong,  where  his  pretended  agent  resides. 
This  foreign  name  is  then  used  by  the  Chinese  to 
transact  all  Customs  business,  take  out  transit 
passes,  etc.,  and  by  assuming  nominal  ownership 
of  the  goods  to  their  destination  secures  Consular 
intervention  in  case  of  likin  interference  en  route. 
Thus  it  is  that  various  foreign  names  figure  at 
Wuchow  and  appear  in  the  Customs  books  as 
the  importers  of  considerable  quantities  of  goods, 
whereas,  in  reality,  they  are  Chinese  engaged  as 
Customs  brokers  under  a  foreign  name.  One  dif- 
ficulty of  the  assumed  ownership  system  is  that  it 
enables  Chinese  to  practise  evasions  of  likin,  ne- 
cessitating the  closest  scrutiny  on  the  part  of  the 
Consul  of  any  case  brought  before  him.  At  the 
best,  it  is  a  state  of  things  which  does  not  com- 
mend  itself  to  those  interested  in  the  legitimate 
expansion  of  trade;  but  it  has  been  brought  into 
existence  by  the  corrupt  fiscal  administration  of 
Chinese  officials,  which  drives  their  own  nationals 
to  seek  protection  under  cover  of  a  foreign  name 
to  secure  equality  of  treatment.     No  doubt  it  will 



disappear  with  the  introduction  of  reform,  the  first 
step  towards  which  will  be  the  publication  of  the 
likin  tariff  on  inland  waters.  I  have  referred  to 
this  in  the  chapter  on  "  Trade." 

The  reason  the  British  flag  is  not  better  repre- 
sented on  the  West  River,  and  that  the  junks  fly- 
ing no  flag  at  all  have  been  permitted  to  gain  the 
ground  they  have  in  the  carrying  trade,  is  as  fol- 

Previous  to  the  opening  of  the  river,  the  likin 
exactions  were  so  heavy  and  vexatious  as  to  cause 
nearly  all  trade  to  be  diverted  to  such  routes  as 
the  Pakhoi  overland  to  Nanning,  Hanoi-Lung- 
chow  to  Nanning,  etc.,  all  of  which  routes  are  in- 
ferior to  the  direct  route  by  the  West  Riven  The 
difficulty  of  estimating  the  volume  of  such  trade, 
and  how  much  of  it  could  be  relied  upon  to  return 
to  its  natural  channel  under  the  regime  oi  the  I.M. 
Customs,  caused  the  large  shipping  companies  of 
China  to  pause  before  investing  capital  in  a  class 
of  boats  adapted  to  river  work,  and  for  that  work 
only,  nor  were  they  unsupported  in  their  exercise 
of  caution  when  such  an  authority  as  Sir  Robert 
Hart  did  not  anticipate  that  the  staff  of  the  Wu- 
chow  Customs  would  need  to  be  more  than  a 
nominal  one.  The  delay  has,  however,  been  util- 
ized to  gain  experience  of  the  needs  of  the  trade 
and  of  the  class  of  craft  best  adapted  for  carrying 
it.  These  are  now  under  construction,  and  should 
be  included  in  any  estimate  of  the  British  capital 
employed  on  the  West  River.    With  regard  to  the 



trade  between  Treaty  ports,  etc.,  at  the  opening  of 
the  river  two  British  steamers  were  placed  on  the 
Canton-Wuchow  line,  but  the  differential  treat- 
ment which  is  accorded  to  Chinese  goods  if  car- 
ried in  foreign  steamers  from  port  to  port  on  the 
river  has  restricted  the  earnings  of  the  British 
steamers  above-mentioned,  and  also  those  on  the 
direct  line  to  Hong  Kong,  although  in  a  less  de- 
gree, to  practically  passenger  traffic  only. 

Under  such  restrictions  it  is  not  to  be  wondered 
at  that  the  shipping  companies  interested  were 
slow  to  invest  capital  in  the  building  of  steamers 
for  a  trade  so  little  likely  to  prove  remunerative. 

The  practice  at  present  prevailing  at  the  Treaty 
ports  with  regard  to  the  junks  towed  by  steam- 
launches,  is  for  the  junk  towed  and  her  cargo  to 
come  under  the  likin  authorities,  and  the  launch 
which  tows  it,  but  carries  no  cargo,  comes  under 
the  I.M.  Customs ;  a  dual  system  of  control,  pro- 
ductive of  much  smuggling  and  evading  of  rev- 

The  merchants  complain  very  much  on  the 
West  River  of  the  preferential  rights  accorded  by 
likin  officials  to  native  craft,  in  which  officials  are 
interested,  and  also  to  similar  rights  being  extend- 
ed to  native  -  owned  cargo.  This  practice  is  op- 
posed to  Treaty  rights. 

I  will  summarize  the  points  of  interest  about 
the  West  River  trade  as  brought  to  my  notice  by 
the  merchants: 

I.  British  merchants  do  not  possess  a  direct 



pecuniary  interest  in  goods  to  the  point  of  desti- 
nation in  China. 

2.  That  the  British  ship-owner  does  possess  a 
direct  interest,  and  can  be  relied  upon,  if  allowed, 
to  push  his  vessels  to  all  and  any  parts  of  China 
where  navigable  waters  exist. 

3.  That  with  the  advent  of  the  British  ship 
comes  establishment  of  genuine  British  firms  in 
the  interior.  The  reform  of  taxation  will  follow, 
and  with  it  a  greater  sale  of  British  goods. 

4.  That  the  ship-owner  at  pfesent  is  under  a 
grave  and  serious  disadvantage,  owing  to  the  dif- 
ferential treatment  which  is  accorded  to  Chinese 
cargo  carried  in  junks.  That  it  is  not  a  matter 
which  concerns  the  ship-owner  only,  nor  is  it  a 
matter  solely  between  the  Chinese  Government 
and  its  subjects;  but  that  it  is  a  direct  tax  on  all 
steamer-borne  British  goods. 

5.  That  according  to  the  interpretation  put 
upon  the  Inland  Water  Regulations  by  the  I.M. 
Customs  this  state  of  things  will  not  be  remedied. 

If  the  foregoing  contentions  be  correct,  it  is  a 
matter  for  the  earnest  consideration  of  the  Asso- 
ciated Chambers.  It  appears  to  me  that  it  is  neces- 
sary to  secure  an  equality  of  treatment  for  all 
goods,  no  matter  how  carried,  as,  in  pushing  the 
interests  of  ship-owners,  merchants,  and  manu- 
facturers who  supply  China  with  foreign  goods 
will  also  benefit.  The  first  step  to  be  taken  in 
this  direction  is  to  make  the  Inland  Water  Regu- 
lations apply  to  all  inland  waters  without  distinc- 



tion,  and  to  all  craft  and  their  cargoes,  whether 
steamers  or  junks. 

Piracy  on  the  West  River  is  another  serious 
hinde ranee  to  trade.  Under  the  chapter  on  Canton 
I  give  some  instances  of  the  proportions  to  which 
it  has  grown,  and  the  inability  of  the  local  officials 
to  cope  with  it. 

The  West  River,  like  all  the  waterways  in  China, 
should  be  surveyed  by  foreign  civil  engineers,  in 
order  that  some  economic  and  effectual  proposal 
should  be  made  to  secure  the  conserving  of  this 
cheap  and  valuable  method  of  transport 


The  Ho  Han  Ho,  or  Yellow  River,  is  so  called 
from  the  yellow  deposit  of  mud  which  it  brings 
down,  and  which  makes  even  the  sea  of  a  yellow 
tinge  for  many  miles  from  its  mouth.  Although 
less  important  to  trade  than  either  the  West 
River  or  the  Pei  Ho,  in  length  and  volume  it  is 
equalled  among  the  rivers  of  China  only  by  the 

It  rises  in  the  plains  of  Odontala,  not  far  from 
the  source  of  the  Yangtse,  and  is  about  3000 
miles  in  length.  After  a  long  course  among  the 
mountains,  it  reaches  the  great  plain  of  China, 
which,  as  a  matter  of  fact,  consists  of  the  alluvial 
deposit  brought  down  by  it  and  other  rivers  in 
former  ages.  It  may  be  said  to  leave  the  hills 
at  a  place  called  Kung  (hsien),  some  80  miles 

Y  337 


west  of  Tai  Fong  Fu,  and  from  this  point  it  has 
from  time  to  time  wandered  sometimes  to  the 
northwest  of  Shantung,  discharging  into  the  Gulf 
of  Pechili,  and  sometimes  to  the  south  of  Shan- 
tung, where  it  was  flowing  at  the  time  the  first 
authentic  map  of  China  (1853)  was  made.  In 
1853  another  of  those  changes  took  place  in  the 
course  of  the  Yellow  River  which  have  earned  for 
it  its  terrible  reputation,  and  it  then  cut  out  for 
itself  the  present  channel.  The  Yellow  River  has 
often  been  called  "  China's  Lament,"  as,  from  the 
earliest  history  of  the  Empire,  it  has  periodically 
broken  its  banks  and  flooded  the  country,  causing 
dreadful  devastation  and  loss  of  life.  In  our  own 
times  the  floods  of  1887,  when  the  river  broke  its 
banks  and  caused  wide-spread  misery, are  especially 
to  be  remembered,  and  from  the  accounts  which  I 
received  while  in  China  it  would  appear  that  the 
disaster  of  1898  was  equally  terrible  in  its  effect 
Large  parts  of  the  Province  of  Shantung  and  over 
one-half  of  the  Province  of  Honan  were  inundated. 
Millions  of  lives  were  lost  and  whole  towns  and 
villages  were  swept  away.  These  periodical  inun- 
dations, which  are  the  scourge  of  the  population  of 
the  basin  of  the  Yellow  River,  are  due  to  a  curious 
fact.  The  river  brings  down  many  millions  of  tons 
of  yellow  mud  yearly,  and  this  causes  the  bed 
to  rise  till  in  some  parts  it  is  60  feet  above  the 
level  of  the  surrounding  country.  The  Chinese 
keep  building  up  the  banks,  but  sooner  or  later 

the  river  bursts  its  bounds,  and,  after  flooding  the 



country  all  around,  cuts  out  a  fresh  channel  for 
itself,  which  is  sometimes  hundreds  of  miles  from 
its  old  bed.  Then  in  a  few  years  the  same  process 
is  repeated.  Soon  after  I  reached  Peking  his  Ex- 
cellency Li  Hung  Chang  was  sent  to  investigate 
the  causes  of  the  late  floods,  and  to  report  how 
they  could  be  prevented  in  future.  Germany  has 
also  sent  engineers  for  the  same  purpose,  and  the 
Pekin  Syndicate,  a  British  corporation,  has  sent 
engineers  to  survey  this  river.  I  have  the  honor 
to  submit  to  the  Associated  Chambers  the  im- 
portance of  this  question,  as,  although  some  of 
the  accounts  point  to  the  impossibility  of  its  navi- 
gation, it  has  yet  to  be  proved  that  this  is  so. 

From  inquiries  I  made  of  engineers  and  others 
who  have  navigated  part  of  this  river  I  believe 
that  it  offers  few  facilities  for  navigation.  Above 
Tsinan,  for  a  distance  of  250  miles,  there  are  im- 
mense numbers  of  boats  and  a  large  traffic,  but 
boats  drawing  only  18  inches  are  often  ashore  for 
hours.  With  care,  however,  boats  drawing  3  feet 
can  navigate  the  river  from  the  crossing  of  the 
Grand  Canal  up  beyond  Kung  at  low  water,  while 
below  the  Grand  Canal  as  far  as  Lokow,  the  port 
of  Chinan,  large  boats  can  be  used.  Soundings  at 
low  water  here  vary,  I  am  told,  from  7  feet  to  14 
feet.  Below  Lokow  to  the  bar,  vessels  drawing  8 
feet  can  pass,  and  the  bar  is  passable  for  vessels  of 
this  draught  at  high  water.  The  irregular  freshets, 
the  constantly  changing  channel,  and  the  swiftness 
of  the  current  (the  river  has  a  fall  of  13^  inches  in 



a  mile),  combined  with  the  low  depth  of  water 
on  the  bar,  render  it  improbable  that  European 
steamers  will  ever  be  able  to  develop  the  trade  of 
the  surrounding  country  under  present  conditions. 
The  alluvial  plain  through  which  it  passes  is  the 
finest  crop-growing  country  in  China.  It  is  pos- 
sible that  something  might  be  done  to  improve 
this  river.  The  cost  of  such  improvements  will 
be  enormous ;  but  when  the  benefit  derived  from 
the  time  and  money  spent  on  the  Danube,  the 
Mississippi,  and  the  Irrawaddy  are  remembered, 
it  would  appear  that  the  Yellow  River  ought  not 
to  be  abandoned,  especially  as  it  is  necessary  to 
prevent  the  inundations  which  recur  so  frequently 
with  such  terrible  effects. 


The  Wangpoo  River  is  a  tributary  of  the 
Yangtse,  and  is  chiefly  important  owing  to  the 
fact  that  the  chief  Treaty  port  of  China,  Shang- 
hai, stands  upon  it.  The  great  difficulty  of  this 
river  is  the  Woosung  bar. 

As  nearly  8,000,000  tons  of  shipping  entered 
and  cleared  at  Shanghai  in  1897,  the  urgency  of 
something  being  done  to  improve  this  bar  is  ap- 
parent. Passengers  and  cargo  often  have  to  travel 
some  fifty  miles  up  the  river  to  Shanghai  in  steam- 
launches  and  barges.  It  has  been  suggested  that 
the  nature  of  the  silt  would  render  it  possible  for 
a  channel  to  be  cut,  which   the  current  would 



probably  keep  open,  although  the  bar  would  pos- 
sibly extend  farther  than  it  does  now,  owing  to 
the  silt  carried  through  the  channel  depositing 
itself  on  either  side. 

The  Chamber  of  Commerce  at  Shanghai,  com- 
posed of  all  nationals,  were  extremely  urgent  in  their 
representations  that  something  should  be  done. 
As  they  very  justly  pointed  out,  if  the  large  fees 
collected  from  foreign  shipping  were  used  proper- 
ly  they  would  allow  of  conservancy  charges  being 
met.  The  remedy  asked  for  by  the  merchants  is 
the  establishment  of  a  proper  Conservancy  Board, 
with  European  representation  upon  it. 


The  Pei  Ho  River  is  the  most  northern  river  in 
China  proper.  On  its  banks  stands  the  important 
Treaty  port  of  Tientsin,  with  a  total  tonnage  of 
over  1,300,000.  Here,  again,  there  is  a  trouble- 
some bar.  Large  sums  of  money  have  been  spent 
upon  its  improvement  by  the  Chinese  authorities, 
but  without  success. 

The  difficulties  are  twofold.  The  river  over- 
flows its  bank,  and  also  makes  a  bar  by  depositing 
mud.  Some  years  ago  a  French  engineer  under- 
took to  remedy  the  inundations,  and  constructed 
canals  to  take  off  the  surplus  water.  An  unfort- 
unate error  was  made.  The  level  of  the  locks 
was  placed  below  the  level  of  the  water  at  flood. 
The  result  was  that  all  the  clear  water  flows  away 



over  the  top  of  the  locks  and  only  the  sediment 
goes  down  to  the  sea  to  be  deposited  on  the  bar. 
In  flood  the  freshet  is  of  no  use  for  the  purpose  of 
cleaning  the  river. 

The  Anglo-Saxon  and  other  foreign  merchants 
here  took  the  matter  into  their  own  hands  and  be- 
stirred themselves  so  well  that  the  Viceroy  of 
Chihli  offered  100,000  taels  towards  the  250,000 
which  an  English  engineer  estimated  would  be 
the  cost  of  deepening  the  river.  This  offer  was 
made  on  condition  that  the  foreign  community 
should  contribute  the  150,000  taels  remaining. 

The  Municipal  Council  at  Tientsin  Foreign 
Settlement  raised  a  loan  for  this  amount  at  six 
percent,  issuing  bonds  for  the  money  to  the  Hong 
Kong  and  Shanghai  Bank  who  negotiated  them. 
In  order  to  provide  the  interest  on  this  loan  and 
repay  the  capital  in  twelve  years,  the  Municipal 
Council,  with  the  consent  of  the  Chinese  author- 
ities, will  levy  wharfage  on  all  goods  landed  at  the 
settlement.  It  is  hoped  that  the  expenditure  of 
this  250,000  taels  will  permanently  improve  the 
river ;  but  if  not,  there  is  a  proposal  to  ask  the 
authorities  that  Tongku,  at  the  mouth  of  the  river, 
be  made  a  Treaty  port. 


The  Liao  River  flows  through  Northern  Man- 
churia. Some  distance  up  the  river  stands  the  im- 
portant port  of   Newchwang,  which  is  generally 



called  Yingkau  by  the  Chinese.  At  the  time  of 
my  visit  there  was  probably  an  increase  of  shipping, 
owing  to  the  winter  being  so  close  at  hand.  The 
change  in  temperature  is  very  sudden,  and  the  port 
often  closes  in  twenty-four  hours,  owing  to  ice.  I 
counted  twenty  steamers  and  2000  junks  while 
coming  down  the  river.  The  E.  Sang,  the  vessel 
I  was  travelling  by,  touched  the  bar  going  out, 
but  did  not  stick.  A  vessel  coming  in  was  less 
fortunate,  and  we  left  her  on  the  bar  waiting  for 
the  next  tide. 

The  river  has  a  curious  bend  above  the  port, 
and  while  it  has  gradually  washed  away  all  but  a 
few  hundred  yards  of  the  British  concessions  on 
the  right  bank,  it  deposits  mud  in  the  bend  on 
the  left  bank.  The  new  British  and  Japanese 
concessions  are  on  this  new  land  in  the  bend  of 
the  river.  The  Russian  concession  is  higher  up 
the  river,  and  is  situated  on  the  extreme  apex  of 
the  bend. 


The  Han  River  is  a  tributary  of  the  Yangtse, 
which  it  enters  at  Hankow.  It  is  navigable  for 
the  largest  Chinese  junks  for  about  ten  months 
in  the  year  as  far  as  Laohoken.  There  is  no 
steamer  traffic  on  it  whatever,  owing  to  the  fact 
that  there  is  no  open  port  upon  it.  In  January 
and  February  the  water  is  very  low,  less  than  5 
feet.  The  two  most  important  towns  situated  on 
it  are  Laohoken  and  Siangyang.     The  former  is  a 



very  big  place.  Siangyang  is  connected  by  tele- 
graph to  Hankow.  Between  Hankow  and  Siang- 
yang there  is  a  big  "  bore  "  which  runs  from  4  feet 
to  1 2  feet  in  height.  It  formerly  caused  enormous 
loss  of  life  and  property.  This  "  bore  "  is  active 
between  the  middle  of  March  and  the  middle  of 
June.  A  1 2-feet " bore  "  takes  eight  hours  between 
Hankow  and  Siangyang — a  distance  of  about  160 
miles.  A  4-feet  "  bore  "  takes  much  longer.  Now 
telegraphic  communication  is  sent  to  Siangyang, 
and  the  junks  get  due  warning  of  the  approach  of 
the  "  bore." 

I  was  only  able  to  go  a  short  distance  up  the 
Han  River  in  a  steam-launch,  as  my  time  was 

Many  of  the  smaller  rivers  in  China  are  silting 
up;  and  several  cities,  at  one  time  of  great  impor- 
tance, have  lost  their  water  communication  and 
are  now  places  of  little  note.  For  instance,  at 
Haikwan  there  was  formerly  a  great  cotton  trade, 
but  now  the  growers  have  had  to  reduce  their  crop. 
Hwangpi  is  another  town  that  has  suffered  from  a 
similar  reason.  The  silt  in  nearly  all  the  rivers  is 
very  light,  and  could  be  easily  dredged  with 
dredges  similar  to  those  used  on  the  Mersey.  I 
believe  there  is  also  a  special  dredger  used  for 
work  where  the  silt  is  always  in  motion.  There 
used  to  be  one  of  this  character  used  on  the 
Thames.  Similar  dredges  would  be  very  useful 
on    Chinese   rivers.     Many   of   the   rivers  pass 



through  gold  districts.  I  heard  that  gold  was 
found  both  up  the  Yangtse  and  the  Liao  rivers. 
Gold  dust  is  also  brought  down  the  Yuen  River 
(which  runs  into  the  Tung  Ting  Lake)  in  fairly 
large  quantities.  Prospectors  might  direct  their 
attention  to  these  rivers. 


In  dealing  with  the  waterways  of  China  it  is 
impossible  to  overlook  the  Tung  Ting  Lake  and 
Siang  River.  Although  I  was  unable  to  visit 
either  of  these,  from  what  I  could  learn  the  lake 
is  gradually  getting  shallower.  The  position  of 
this  lake,  and  its  connection  with  the  Great  Yang- 
tse, which  flows  through  it,  and  with  the  Siang 
River,  which  runs  into  it  from  the  south,  ren- 
ders it  an  important  inland  water.  At  the  open- 
ing of  the  lake  is  the  port  of  Yohchau,  which  has 
lately  been  open  to  foreign  trade. 

The  Siang  River  comes  from  the  south  of 
Changsha,  which  is  an  important  city  in  Hunan. 
It  seems  very  desirable  that  this  town  should  be 
opened  up  to  foreign  trade. 

Between  Changsha  and  Siangtang  the  Siang 
River  is  half  a  mile  wide.  Hunan,  the  province 
through  which  it  flows,  is  the  most  anti-foreign  in 
China,  and  probably  the  least  known  to  the  for- 
eigner. Its  capabilities  are  said  to  be  enormous. 
The  universal  opinion  is  that  it  is  very  rich  in 
minerals.     The  new  inland  navigation  rules,  by 



opening  up  the  Siang  River  and  the  Tung  Ting 
Lake,  should  add  to  foreign  trade  very  consider- 


The  Foyang  Lake  is  of  some  considerable  im- 
portance to  Chinkiang  and  other  ports  on  the 
Yangtse  River,  with  which  there  is  direct  com- 
munication. Since  the  new  navigation  rules,  six 
British-owned  steam-launches  have  been  sent  from 
Chinkiang,  and  there  is  every  likelihood  that  this 
venture  will  be  a  very  successful  one. 


There  are  said  to  be  20,000  miles  of  roads  in 
China,  nearly  all  of  which  were  made  in  the  reign 
of  a  former  emperor.  I  visited  Peking  about 
thirty  years  ago.  On  my  return  visit  last  year  I 
found  it  unchanged,  except  that  it  was  thirty  times 
dirtier,  the  smells  thirty  times  more  insufferable, 
and  the  roads  thirty  years  the  worse  for  wear.  A 
mule  was  drowned  in  a  hole  in  the  middle  of  the 
roadway  opposite  one  of  the  Foreign  Legations  a 
few  weeks  before  my  arrival.  China  has  a  very 
good  system  of  roads  in  spite  of  their  bad  condi- 
tion. All  that  is  required  is  to  make  the  so-called 
roads  available  for  locomotion  and  transport.  The 
caravan  and  trade  routes  all  require  good  roads  to 
be  made  upon  them,  and   among  the   reforms  I 

have  suggested  in  my  concluding  observations,  a 



Department  for  Roads  and  Waterways  will  be 
found  included.  The  roads  might  be  placed  under 
the  proposed  Conservancy  Board  of  the  Water- 
ways. In  Egypt  the  making  and  maintenance  of 
the  roads  have  been  undertaken  by  the  irrigation 
officers  with  the  greatest  success. 

Large  sums  of  money  are  put  apart  for  repair 
and  maintenance  of  the  roads  in  Peking,  but  it  is 
only  the  officials  who  know  where  the  money  goes 
to.  A  Mandarin  gets  a  high  salary,  and  a  large 
budget  is  allowed  him  for  lighting  the  Peking 
roads.  I  was  informed  there  are  only  six  oil-lamps 
that  represent  this  outlay,  but  I  could  not  ascer- 
tain their  locality. 



The  British  Consul  in  China  is,  as  a  rule,  hard- 
working, painstaking,  and  devoted  to  the  interests 
of  his  nationals;  but  throughout  China  I  was 
struck  by  the  strong  sentiments  expressed  by  the 
British  commercial  community  on  the  subject  of 
the  Consular  Body.  In  my  humble  opinion,  the 
British  merchant  is  too  harsh  in  his  judgment  on 
this  question ;  but  it  is  only  fair  to  add  that  nearly 
all  the  merchants  and  Chambers  of  Commerce 
with  whom  I  conferred  on  this  subject  readily  ad- 
mitted that  the  faults  which  existed  were  due  more 
to  the  system  than  to  the  Consuls  themselves. 
However,  the  Consular  Body,  like  any  other  public 
officials,  are  accustomed  to  receive  all  the  blame 
when  things  go  badly,  while  their  Government 
appropriates  all  the  credit  if  affairs  go  well.  They 
will  readily  understand  that  in  drawing  attention 
to  the  facts  which  were  brought  to  my  notice  it  is 
not  my  intention  to  blame  individuals,  but  to  show 
where  improvements  in  the  present  system  are 

The  complaints  made  by  the  mercantile  com- 
munity may  be  tabulated  as  follows : 



1.  That  the  Consuls  are  diplomatic  agents 
more  than  representatives  of  trade  and  com- 

2.  That  under  the  present  system  they  are 
not,  except  in  a  few  cases,  good  business  men. 

3.  That  the  Consuls  of  other  nations  do 
more  for  their  nationals,  particularly  in  the 
matter  of  promoting  trade,  by  introducing 
commercial  men  to  Chinese  officials. 

4.  That  in  the  matter  of  transit  passes 
and  other  facilities  for  trade,  the  British  nar 
tional  receives  less  privileges  from  his  Con- 
sular officer  than  any  other  foreigner  in 
China,  and  that  all  fees  charged  by  the 
British  Government  are  higher  than  by  other 

Although  the  Consuls  deserve  every  support 
and  consideration  in  their  difficult  duties,  it  is  well 
to  remember  how  very  important  it  is,  in  the  inter- 
ests  of  trade  and  commerce,  that  everything  should 
be  done  to  secure  to  the  British  merchant  in  China 
that  assistance  and  support  to  which  he  is  justly 
entitled.  I  talked  over  these  complaints  both  with 
the  Consuls  themselves  and  with  the  Imperial  Chi- 
nese Customs  authorities,  who  naturally  have  a 
good  deal  to  do  with  the  Consular  Body,  and  I  am 
bound  to  state  that  the  Consuls  admitted  there 
were  defects  in  the  present  system,  and  that  the 
Customs  authorities  appeared  to  support  the  views 
of  the  British  merchants. 



The  first  complaint,  that  the  duties  of  the  Con- 
suls are  more  diplomatic  than  commercial,  is  quite 
true;  but  is  easily  explained.  In  countries  like 
China  extra-territorial  rights  are  conceded  by  the 
native  Government  to  all  foreigners.  In  other 
words,  no  foreign  subject  can  be  tried  and  punished 
by  the  native  tribunals,  but  is  subject  to  the  law 
as  administered  by  his  own  authorities.  The  re- 
sult is  that  the  British  Consul  in  China  is  not  only 
a  representative  of  the  British  Government,  to  pro- 
tect British  trade,  but  he  is  also  a  member  of  the 
Diplomatic  Corps,  and  is  the  representative  of  his 
Government  (acting  through  the  British  Minister) 
in  all  political  questions  in  his  district.  The  ordi- 
nary Consul  in  an  European  port  is  merely  a  Brit- 
ish  trade  agent;  but  in  China  he  is  something 
more  than  this.  He  may  be  the  representative 
of  the  British  Government  in  an  area  as  large  as 
France  or  Germany,  and  the  native  population  in 
his  district  may  be  as  widely  separated  in  language 
from  the  rest  of  China  as  the  inhabitants  of  one 
European  country  are  from  the  inhabitants  of 
another  country. 

The  duties  of  the  British  Consul  in  China  do 
not  end  here.  He  exercises  all  the  authority  of 
a  judge  in  both  civil  and  criminal  cases,  and  is 
expected  to  have  some  knowledge  of  English  and 
Chinese  law,  although  he  is  never  given  any  facili- 
ties for  acquiring  such  knowledge.  He  also  exer- 
cises a  general  supervision  over  the  British  com- 
munity and  possesses  considerable  power  over 



them.  He  is  bound  to  register  every  British  sub- 
ject in  his  area  of  jurisdiction  once  a  year.  He 
registers  all  sales  and  purchases  of  land  by  his 
nationals,  and  no  marriage  is  legal  without  his  aid. 
It  is  quite  impossible  under  the  present  system 
to  avoid  making  the  work  of  the  Consular  Body 
diplomatic  as  well  as  commercial,  and  the  conse- 
quence is  that  the  commercial  duties  are  bound  to 
suffer.  The  merchants  have,  therefore,  a  legitimate 
ground  of  complaint  on  this  head. 


The  remedy  which  I  would  suggest  to  the  As- 
sociated Chambers  of  Commerce  is  that  a  com- 
mercial attache,  with  a  proper  Intelligence  Depart- 
ment, should  be  appointed  for  China,  and  that 
assistant  judges,  police  magistrates,  etc.,  should  be 
appointed,  so  as  to  relieve  the  Consular  Body  of 
part  of  their  work.  These  latter  should  have  a 
legal  training.  Very  few  Consuls  possess  a  legal 
training,  and  when  they  do  it  is  only  because  they 
are  energetic,  brilliant  men,  who  have  studied  law 
at  their  own  expense  while  on  leave  at  home. 

With  regard  to  the  commercial  attache,  this  is 
a  point  which  has  long  been  pressed  by  the  China 
Association  and  British  merchants  in  China.  It 
is  more  needed,  perhaps,  than  in  any  other  coun- 
try. It  may  be  said  that  a  commercial  attache  has 
been  appointed,  but  the  so<:alled  appointment  has 
been  only  a  farce. 



What  the  merchants  asked  for  was  the  crea- 
tion of  a  distinct  office ;  to  be  filled  by  a  qualified 
man,  with  a  sound  business  training  and  of  suf- 
ficient position  and  ability  to  make  the  Chinese 
authorities  treat  him  with  respect,  and  his  repre- 
sentations with  prompt  attention  and  considera- 

In  order  to  meet  their  wishes,  the  appointment 
was  offered  to  one  of  our  best  Consuls  in  China, 
but  at  a  lower  salary  and  allowances  than  he  is  al- 
ready receiving.  Very  naturally  he  declined  this 
generous  offer;  and  to  make  matters  more  ludi- 
crous, the  title  of  "commercial  attache"  was  added 
to  the  office  of  Consul-General  at  Shanghai,  with 
a  salary  of  one  hundred  pounds  a  year.  This  was 
merely  adding  an  impossible  task  to  the  already 
over  -  burdened  work  of  the  Consul  -  General,  and 
making  him  a  present  of  a  hundred  pounds  a  year 
for  work  which  he  could  not  perform.  The  mer- 
chants generally  made  one  special  point  as  to  the 
appointment,  and  that  was  that  they  would  prefer 
not  to  have  a  Consul  appointed  unless  a  man  of 
high  standing,  whom  they  could  have  confidence 
in,  of  which  there  are  several  in  China.  They 
were  of  opinion  that  he  should  have  a  special 
business  training. 

The  second  complaint,  that  the  Consuls — with 

few  exceptions  —  are  not  good  business  men,  is 

perfectly  true.     This  again,  however,  is  the  fault 

of  the  system  rather  than  of  the  men  themselves. 

There  are  some  notable  exceptions.  -  The  Consu- 



lar  Body  is  selected  by  open  competitive  examina- 
tions among  mere  lads.  The  examinations  are 
usually  held  twice  a  year.  The  young  gentlemen 
who  succeed  are  sent  straight  out  to  China  and 
go  up  to  Peking,  where  they  are  shut  up  for  two 
years  grinding  at  the  official  Chinese  dialect. 
They  are  then  sent  direct  to  one  of  the  smaller 
ports  of  China  as  assistants  in  the  Consul's  office 
for  another  three  years,  doing  despatch  work,  etc., 
and  very  often  are  Vice-Consuls  before  they  have 
any  knowledge  or  experience  of  the  world,  or  have 
moved  about  among  English  commercial  men. 
The  consequence  is  that  the  system  makes  men 
narrow  and  pro-Chinese  in  their  sympathies,  and 
when  this  is  not  the  case  it  is  only  due  to  su- 
perior ability  and  energy  on  the  part  of  the  men 

The  remedy  suggested  is  that  after  the  two 
years  in  Peking,  and  a  year  in  a  port,  the  young 
Consuls  should  be  sent  home  for  a  couple  of  years 
to  study  law  and  gain  a  wider  experience  of  men 
and  matters  than  a  small  Chinese  port  can  teach 

The  third  complaint — viz.,  that  other  foreign 
nations  in  China  give  better  Consular  assistance 
to  their  commercial  men  than  Great  Britain — 
seems  to  have  some  foundation.  The  Consuls, 
on  the  other  hand,  present  a  very  good  case  in 
reply.  They  say:  "We  have  64  per  cent,  of  the 
whole  foreign  trade  of  China,  and  that  trade  has 
been  built  up  under  the  British  system  of  allow- 

2  353 


ing  the  merchant  to  know  his  own  business  better 
than  any  Government  can  know  it  for  him.  The 
system  also  works  well  with  the  Chinese,  as  they 
appreciate  the  fact  that  we  are  not  always  bullying 
them  on  behalf  of  our  nationals  as  the  Consuls  of 
other  Powers  often  do." 

There  is  a  good  deal  to  be  said  on  both  sides ; 
but  there  seems  to  be  no  doubt  that  we  have  ar- 
rived at  a  time  when  the  British  Government  will 
seriously  have  to  consider  whether  the  system  of 
non-intervention  hitherto  pursued  should  not  be 
modified.  Up  till  now  private  enterprise  has 
brought  Great  Britain  to  her  present  superior 
commercial  position,  and,  therefore,  the  existing 
system  has  been  a  success.  Conditions  change, 
however,  and  policies  should  change  with  them. 
The  British  merchant  does  not  ask  for  grand- 
motherly interference  with  his  business.  He  is 
quite  capable  of  attending  to  it  himself,  but  in 
these  days  of  fierce  competition  what  he  does 
want  is  an  equal  opportunity  with  the  merchants 
of  other  nations  in  dealing  with  the  Chinese 

In  matters  such  as  obtaining  concessions,  min- 
ing rights,  etc.,  tenders  for  Government  work,  or 
the  introduction  of  goods  specially  adapted  to  the 
requirements  of  the  provincial  officials'  needs,  or 
the  needs  of  their  departments,  the  merchant — no 
matter  how  enterprising  —  has  no  status  which 
will  enable  him  to  obtain  a  hearing.  British  mer- 
chants complain   that  their  Consuls  have  been 



known  to  refuse  to  afford  them  the  introductions 
and  facilities  which  other  Consuls  give  to  their 

In  every  case  where  this  complaint  was  made  I 
asked  for  evidence,  and  here  are  a  few  examples 
which  were  quoted  to  me.  All  the  cases  occurred 
in  1898: 

A  British  mining  engineer  wanted  an  introduc- 
tion to  a  Viceroy  with  the  idea  of  applying  for  the 
post  of  surveyor  under  the  Chinese  Government 
to  prospect  for  minerals  in  Western  China.  Apart 
from  the  personal  advantage  to  be  gained,  he 
claimed  that  it  was  to  the  advantage  of  any  country 
that  its  nationals  should  make  such  surveys,  as 
they  would  become  acquainted  with  the  mineral 
wealth  of  the  country,  and  have  a  voice  in  the  em- 
ployment and  nationality  of  the  engineers  who 
come  out,  and  would  advise  where  the  necessary 
machinery  should  be  bought.  The  Consul  to 
whom  he  applied  flatly  refused  to  give  him  such 
an  introduction,  giving  as  a  reason  that  if  he  gave 
him  an  official  letter  and  he  was  refused  an  in- 
terview, it  would  be  an  insult  to  Great  Britain, 
and  the  Consul  would  be  put  to  a  great  deal  of 

In  another  case  application  was  made  for  a  let- 
ter of  introduction  to  a  Mandarin  in  high  author- 
ity. A  very  curt  letter  was  given.  As  the  British 
subject  in  question  was  specially  recommended  to 
the  American  Consul,  he  went  to  him  and  asked 
for  a  letter  of  introduction  to  his  Excellency,  re- 



ceiving  at  once  a  very  warm  letter,  which  procured 
him  an  interview.  At  this  interview  his  Excellen- 
cy inquired,  "  How  is  it  that  you,  a  British  subject, 
have  a  better  recommendation  from  the  American 
than  from  your  own  Consul?"  His  Excellency 
also  stated  that  on  the  English  letter  he  should 
not  have  taken  him,  but  as  it  was  he  gave  him 

At  another  place  the  British  Consul  refused  to 
give  a  letter  of  introduction  to  the  Arsenal,  and 
said  that  privately  he  would  do  all  he  could,  but 
that  officially  he  could  not  do  anything. 

Without  pronouncing  any  opinion  on  these 
cases,  I  think  they  are  matters  for  the  considera- 
tion of  the  Associated  Chambers  of  Commerce. 
Reference  to  the  complaints  of  the  British  com- 
munities  will  be  found  in  other  chapters,  notably 
under  Chinkiang,  where  there  had  been  twelve 
changes  of  Consuls  in  three  years. 

The  last  grievance,  with  regard  to  fees,  was  this. 
That  the  fees  charged  all  round  were  much  too 
high;  but  the  fee  for  transit  passes,  even  when 
only  two  and  a  half  dollars  a  pass,  was  exception- 
ally obnoxious,  because  American  transit  passes 
were  issued  free  of  charge  by  many  American 
Consuls.  One  large  firm  calculated  that  they 
used  I  GOO  to  1500  passes  in  the  year,  and  their 
American  rivals  the  same  number.  This  meant 
that  the  British  firm  had  to  pay  between  3000  and 
4000  dollars  a  year  more  for  the  privilege  of  be- 
ing British  traders. 



The  scale  in  force  appears  to  be  as  follows : 

Japan 2  dollars 

France 240  " 

Russia 1.50  " 

U.S.A.,  nil 
Germany,  often  nil 

The  British  charge  has  lately  been  reduced  to 
2.50— it  used  to  be  4.50.  It  certainly  seems  de- 
sirable that  the  Associated  Chambers  of  Com- 
merce should  take  up  this  point  in  order  to  secure 
equal  opportunity  for  all  merchants.  It  would  ap- 
pear that  endeavors  should  be  made  to  arrive  at 
an  understanding  with  other  Powers  for  a  uni- 
form scale  of  fees  to  be  charged.  The  difference 
seems  a  trifle,  but  in  the  aggregate  it  amounts  to 
a  sum  equal  to  the  rent  of  many  firms. 

A  most  serious  complaint  against  the  Consular 
system  appears  to  be  that  contained  in  a  letter 
from  the  Chinese  subjects  of  Great  Britain  in 
Hong  Kong.  This  I  have  already  referred  to  at 
length  under  the  chapter  on  "  Hong  Kong." 

The  consensus  of  opinion  in  China  is  that  there 
is  great  room  for  improvement  in  the  Consular 
Body.  The  men  do  not  obtain  the  experience  or 
training  so  necessary  to  fit  them  for  their  respon- 
sible work.  They  get  worn  out  under  the  present 
retirement  system ;  the  service  has  been  starved, 
overworked,  and  underpaid.  The  men  must  dete- 
riorate mentally  and  physically  during  the  last  few 
years  of  their  service. 



The  remedies  suggested  are  more  men,  better 
pay,  and  earlier  retirement  There  should  be  a 
few  very  well-paid  men,  and  the  others  should 
get  better  paid  than  at  present.  The  pension 
should  be  ;^500  a  year  after  twenty-five  years'  ser- 
vice.  To  reduce  the  cost  of  these  improvements, 
there  should  be  more  Vice -Consuls  instead  of 
Consuls  at  the  smaller  ports. 

The  merchants  are  very  anxious  that  additional 
Consuls  should  be  appointed  at  one  or  two  places 
where  there  is  no  British  Consul  now;  one  of 
these  places  is  Changsha,  in  the  province  of  Hu- 
nan, and  another  is  Kirin,  in  Manchuria. 



I  AM  fully  aware  how  incompetent  I  am  to  deal 
with  such  an  intricate  subject  as  the  Finance  and 
Currency  of  China,  and  for  the  opinions  and  facts 
in  the  following  chapter  I  am  indebted  to  the  va- 
rious authorities  whom  I  consulted  during  my 
Mission,  and  to  recognized  experts  on  Chinese 
finance,  including  various  bank  managers  at  the 
ports  throughout  China  and  in  London,  and  es- 
pecially  to  Mr.  T.  Jackson,  chief  manager  of  the 
Hong  Kong  and  Shanghai  Bank,  Hong  Kong, 
and  to  Mr.  C.  S.  Addis,  of  the  same  bank's  Shang- 
hai branch,  from  whose  letter  to  the  London 
Chamber  of  Commerce  I  quote  fully. 

Recognizing  the  difficulties  of  this  subject,  not 
only  to  myself,  but  to  the  ordinary  public,  I  made 
a  very  complete  collection  of  the  coinage  in  use  in 
China  in  the  various  provinces,  for  the  benefit  of 
the  Associated  Chambers,  and  I  hope  to  place  this 
on  view  in  some  public  place  where  it  will  be  ac- 
cessible to  all  who  are  interested  in  the  matter. 
It  illustrates  effectively  the  diversity  of  the  coin- 
age, and  the  consequent  difficulties  of  the  trader, 



owing  to  the  variations  as  well  as  the  fluctuations 
in  the  rate  of  exchange. 

The  collection  consists  of  the  following: 





Province  Hunan 

Town  Changsha 






























































1  Newchwang 


























Sycee     . 







Central  Szechuan  1150  cash  per  tael. 

Chungking  1080     "  " 

Wuhu  1320     "  " 

Shantung  12 10     " 

Shanghai  1170     " 

Peking  550  large  cash  per  Kung  Fa  tael. 

Subsidiary  Coin 

Ten-cent  and  twenty-cent  pieces : 

Minted  at  Kiangnan,       approximate  value  2)//.  and  5^. 
"       in  Kwangtung  Province      "  "  " 

"        "  Fookien  "  " 

«        "Hupeh  "  "  "  " 

«       "Anhui  "  "  "  " 



Chinese  Dollars 

Minted  at  Tientsin  Arsenal,  approximate  value  2S.  8|//. 
"       "  Kiangnan  " 

"       "  Kwangtung  Province     "  **  " 

"       "  Anhui  «  "  "  " 

«       "  Hupeh  "  "  "  « 

Also  current  in  China : 

Mexican  Republic  scale  dollar. 

Spanish  Carolus  dollar. 

Japanese  yen. 

Indo-China  dollar  (French  Republic). 

British  dollar. 

The  want  of  military  organization  in  China  has 
much  to  do  with  the  financial  weakness  of  that 
country.  Bad  security  means  a  high  rate  of  in- 
terest, or  curtailment  of  borrowing  powers.  The 
credit  of  this  great  Empire  is  now  far  from  good. 
Her  only  honest  available  asset  —  the  I.M.  Cus- 
toms —  is  pledged  to  the  hilt,  and  under  present 
conditions  she  has  neither  good  security  to  offer 
for  future  loans,  nor  revenue  to  meet  her  growing 

As  is  shown  by  the  remarks  of  several  of  the 

Viceroys  (quoted  in  other  chapters),  even  the  funds 

allocated  to  the  provincial  Governments  are  being 

encroached  upon  to  provide  security  for  present 

indebtedness,  and   there    is   a   growing   anxiety 

among  the  people  as  to  whether  the  authorities 

will  find  it  necessary  to  impose  increased  taxation 

to  make  up  for  the  loss  of  provincial  revenue. 



It  needs  no  expert  knowledge  of  finance  to  see 
that  the  whole  system  of  Chinese  financial  admin- 
istration is  utterly  rotten.  China  is  in  a  state  of 
great  financial  embarrassment,  not  because  her  as- 
sets are  small,  but  because  her  revenue  is  wasted 
and  badly  administered,  and  her  capital  resources 
undeveloped  or  squandered,  China  is  not  so 
much  overtaxed  as  badly  taxed,  and  all  that  she 
requires  is  advice  and  assistance  in  reorganizing 
her  finances,  which,  provided  her  military  and  po- 
lice administration  were  perfected,  would  place 
her  in  the  forefront  of  national  credit  on  the 
Western  money  markets. 

The  present  revenue  of  China  is  estimated  to 
amount  to  85,000,000  taels,  but  this  only  repre- 
sents about  one-fifth  of  what  is  actually  collected. 
In  other  words,  the  machinery  of  collection  is  so 
bad  that  it  absorbs  80  per  cent,  of  the  amount 
collected.  Under  proper  supervision  and  admin- 
istration the  revenue  of  China  would  go  up  by 
leaps  and  bounds,  and  taxation  could  actually  be 

The  case  of  Egypt  is  a  splendid  example  of  what 
sound  and  honest  financial  administration  can 
efiFect  If  China  were  assisted  by  the  European 
Powers  to  e£Fect  the  reforms  necessary,  her  posi- 
tion would  be  infinitely  superior  to  that  of  Egypt. 
Her  resources  are  unbounded,  and  if  the  present 
system  of  peculation  and  waste  were  stopped,  she 
would  soon  be  in  a  sound  financial  position. 

The  Chinese  Empire  at  present  owes  between 



;^50,ooo,cxx5  and  ;^6o,ooo,ooo,  for  which  the  reve- 
nue of  the  Imperial  Maritime  Customs  is  pledged. 

The  loans  are  as  follows : 

1.  The  7%  silver  loan  of  1894  (English) 
for  Tls.  10,000,000,  to  be  paid  ofif  in  20  years. 

2.  The  6%  gold  loan  of  1895  (English)  for 
;^3,ooo,ooo,  to  be  paid  ofiF  in  20  years. 

3.  The  4.%  gold  loan  of  1895  (Russo-French) 
for  ;^  1 6,000,000,  to  be  paid  ofif  in  36  years. 

4.  The  5^  gold  loan  of  1896  (Anglo-Ger- 
man) for  ;^  1 6,000,000,  to  be  paid  off  in  36 

5.  The  4i^  gold  loan  of  1898  (Anglo-Ger- 
man) for  ;^  1 6,000,000,  to  be  paid  off  in  45 

In  addition  to  these  there  are  two  loans  of 
;^ I, 000,000  each,  raised  on  other  revenue,  but 
with  a  provision  that  if  other  revenue  fails  the 
Customs  shall  pay  them.  There  are  also  one  or 
two  old  silver  loans  for  small  amounts  still  run- 
ning, but  as  far  as  ability  to  meet  responsibility  is 
concerned,  the  five  loans  above  enumerated  are 
the  only  ones  worth  taking  into  consideration  in 
connection  with  the  duties  collected  by  the  Impe- 
rial Maritime  Customs  and  the  seven  likin  collec- 
torates  pledged  as  collateral  security  for  the  last 
loan.  That  it  was  necessary  to  supplement  the 
Customs  guarantee  by  seven  of  the  likin  collec- 
torates  for  the  last  4^%  Anglo-German  loan,  points 



to  the  fact  that  no  part  of  the  Customs  revenue 
can  be  available  for  additional  loans. 

In  addition  to  this,  China  has  in  the  last  year 
guaranteed  the  interest  on  foreign  loans  negoti- 
ated for  railway  purposes  to  the  amount  of  ;^4,ooo,- 
ooo  for  the  Lu-Han  Railway,  and  ;^2,300,ooo 
for  the  Newchwang  Railway.  Under  the  most- 
favored -nation  clause  this  will  have  to  be  con- 
tinued for  all  railways  employing  foreign  capital, 
and  in  the  present  financial  position  of  the  coun- 
try  these  Government  guarantees  are  certain  to 
hamper  China  very  materially. 

The  immense  natural  resources  of  China  render 
reform  very  easy.  At  present  the  system  is  fatal  to 
honest  finance.  The  provincial  officers  of  all  grades 
receive  bare  pittances  for  salary.  They  often  have 
to  pay  very  large  sums  before  they  take  office, 
borrowing  the  amount  of  the  "squeeze"  from 
Chinese  banks,  or  among  their  own  friends.  The 
consequence  is  that  the  officials  make  as  much  as 
they  can  during  their  term  of  employment,  in  order 
to  repay  themselves  for  the  amount  it  cost  them 
to  obtain  ofiice.  In  addition  to  this,  they  expect  to 
pay  for  the  expenses  of  keeping  up  the  necessary 
state  of  their  position,  and  to  make  a  good  sum 
over  as  a  sort  of  retiring  allowance  when  their 
period  of  office  is  completed.  As  a  matter  of  fact, 
unless  they  get  into  disgrace,  they  usually  succeed 
in  doing  all  this,  and  it  is  therefore  perfectly  easy 
to  understand  the  enormous  leakage  in  the  revenue 
collected  before  it  is  remitted  to  Peking.     One  of 



the  first  necessities  of  financial  reform  in  China  is 
a  system  of  public  accounts  and  proper  salaries  to 
all  officials.  China  has  ample  funds  for  all  purposes, 
including  the  provision  of  an  efficient  military  and 
police,  but  she  must  be  assisted  from  without  if  the 
present  corruption  is  to  be  replaced  by  honest  and 
capable  financial  administration.  In  her  mineral 
rights  she  has  a  source  of  revenue  scarcely  touched. 
The  whole  of  the  mineral  rights  are  the  property 
of  the  Government,  which  exacts  a  rent  for  work- 
ing them. 

The  day  for  loans  guaranteed  by  revenue  is  past 
and  gone,  to  pledge  more  revenue  can  only  result 
in  serious  embarrassment ;  no  more  money  ought 
to  be  lent  except  for  productive  enterprise,  and  then 
only  on  proper  conditions — that  is,  such  conditions 
as  shall  give  lenders  security  on  the  one  hand,  and, 
on  the  other,  enable  China  to  see  her  way  not  only 
to  meet  her  obligations,  but  also  to  derive  sure  and 
certain  additional  benefit  from  the  enterprise  the 
borrowed  money  is  wanted  for  and  expended  upon. 
With  the  question  of  loans  is  mixed  up  the  matter 
of  railway  and  mining  concessions.  Do  people 
really  understand  what  these  amount  to?  Are 
they  merely  to  put  some  money  into  the  pockets 
of  promoters,  or  are  they  to  do  good  work  for  both 
China  and  bondholders  ?  Concessions  may  look 
most  enticing  on  paper;  can  they  really  be  given 
effect  to?  and,  if  so,  will  they  at  once,  or  ever, 
show  the  profits  that  the  people  say  they  promise  ? 
The  public  cannot  act  too  warily  in  these  matters, 



and  if  they  wish  to  avoid  loss  they  would  do  well 
to  consult  firms  of  good  repute  in  China  all  about 
any  concession ;  where  is  the  region,  what  are  its 
contents,  how  are  the  inhabitants  inclined,  how 
were  the  officials  induced  to  support  the  scheme, 
what  local  difficulties  are  there  to  be  encountered, 
what  kind  of  carriage  is  provided  for,  and  what 
demand  is  the  new  supply  to  find,  meet,  or  make. 
All  these  are  points  deserving  of  attention. 

The  appointment  of  a  foreign  financial  adviser  to 
direct  the  administration  and  collection  of  internal 
revenue,  the  reform  of  currency,  the  establishment 
and  centralization  of  mints,  the  establishment  of  a 
Government  Bank,  and  the  remittance  of  provincial 
revenues  and  tribute-rice  by  open  public  tender  in- 
stead of  the  present  extravagant  close  system, 
might,  under  proper  administration,  quadruple  the 
present  revenue  of  China  without  increasing  taxa- 
tion by  a  single  cash. 

Great  Britain's  enormously  preponderating  trade 

and  her  financial  stability,  coupled  with  the  success 

of  her  reforms  elsewhere,  would  entitle  her  to  offer 

China  assistance  in  reforms  of  this  character.    A 

proper  department  of  finance  would  have  to  be 

inaugurated,  and  while  the  head  of  it  might  be  an 

Anglo-Saxon,  its  foreign  employes  should  be  of  a 

cosmopolitan  character,  similar  to  the  personnel  of 

the  Customs  Department    The  policy  of  the  Open 

Door  should  be  maintained  in  this  as  in  other 


Nothing  would  be  more  materially  affected  by 



a  Spheres  of  Influence  policy  than  this  question 
of  the  finances  of  China.  Splitting  up  the  Chi- 
nese Empire  means  loss  to  bondholders  and  the 
disappearance  of  the  security  mortgaged  to  them. 
As  an  instance  of  this,  the  first  Anglo -German 
loan  was  partly  secured  on  Formosa,  Formosa  is 
no  longer  part  of  the  Chinese  Empire. 

If  Spheres  of  Influence  are  marked  out  in  China, 
and  the  resultant  downfall  of  the  Chinese  Govern- 
ment is  brought  about,  who  will  pay  the  bond- 
holders, and  what  security  have  they  for  their 
loans?  What  becomes  of  China's  guarantees  in 
the  matter  of  the  railway  loans?  And  even  if 
these  matters  were  amicably  settled  between  the 
Powers  grabbing  at  Chinese  territory,  how  can 
there  be  any  security  for  interest  being  paid  on 
loans  by  a  country  plunged  into  anarchy  and  re- 
bellion, which  must  seriously  disturb  trade  and 
diminish  the  Customs  receipts? 

The  question  of  China  providing  adequate  se- 
curity against  disorder  and  trouble,  which  may 
lead  to  the  intervention  of  Foreign  Powers  and  the 
partition  of  the  Empire,  is,  as  I  have  endeavored 
to  show  throughout  this  Report,  entirely  a  question 
of  the  reorganization  of  her  army.  Without  this 
there  can  be  no  security  and  no  public  confidence, 
and  therefore  she  is  bound  to  provide  such  ade- 
quate military  and  police  protection.  The  pres- 
ent position  of  China  disturbs  confidence  and 
causes  loss  to  foreign  bondholders.  A  drop  of 
even  i  per  cent,  in  the  price  of  Chinese  loans 



means  a  loss  of  half  a  million  sterling  to  foreign 

The  last  Anglo-German  loan,  floated  in  March, 
1898,  at  90,  fell  to  85}  in  October,  1898,  at  the 
time  I  reached  China,  and  is  now  standing  at  85 
in  April,  1899. 

The  5  per  cent,  loan  of  1896  dropped  from  98f 
to  97i,  the  price  at  the  time  of  my  visit  It  now 
stands  at  99 — April,  1899.  The  prices  of  other 
loans  I  have  mentioned  are  as  follows : 

7th  April,  1899. 

1894.  Tls.  10,000,000  7  ^  Silver,  issued  in  London 

@  98  ^,  quoted ,-    -     -  £105 

1^95*  ;C3)Ooo>ooo  6  ^  Gold,  issued  in  London  @  96^  ^, 

quoted <;^io6 

1895.  ;f  1,000,000  6  ^  Gold  (Cassel),  issued  in  Lon- 

don @  106  ^,  quoted £^og 

1S95.  ;^i,ooo,ooo  6  ^  Gold,  issued  in  Berlin  @  104!^^, 

quoted £106 

1^95'  ;^i 5,820,000  4  ^  Gold,  issued  in  Paris  @  99  ^ 

(guaranteed  by  Russia),  quoted £^o$h 

The  currency  of  China  is  as  confusing  and  as 
hopelessly  involved  as  her  finances.  The  general 
standard  of  value  throughout  the  Empire  is  the 
tael,  which  is  not  a  coin  but  a  weight  of  silver, 
averaging  about  ij  ounce.  This,  again,  varies  in 
the  different  provinces.  The  commercial  standard 
of  tael  is  the  Haikwan  (or  Customs)  tael,  which  in 
1897  averaged  in  value: 

2S,  iif^.,  English; 
$0.72  gold,  American ; 
3.73  francs,  France; 


3.03  marks,  Geman ; 
2.34  rupees,  Indian ; 
1.50  dollars,  Mexican; 

at  the  sight  exchange  on  London,  New  York, 
Paris,  Berlin,  Calcutta,  and  Hong  Kong  respec- 
tively. There  are  various  other  taels  in  use,  the 
most  notable  being  Kuping  (or  Treasury  tael), 
the  Kuaiping  (or  Shanghai)  tael,  and  the  Hankow 
tael.  The  latter  may  be  said  to  be  exactly  3  per 
cent,  in  value  above  the  Shanghai  tael.  There 
is  10  per  cent,  difference  between  the  highest 
and  lowest  of  the  other  three  taels.  Not  only  is 
the  tael  not  a  coin,  but  I  believe  no  weight  of 
silver  exactly  corresponding  to  a  tael  is  ever  used. 
The  smallest  piece  of  silver  in  my  collection,  un- 
minted,  is  1.80  taels  in  value.  The  silver  coin 
used  all  over  China  is  the  dollar,  and  there  are  no 
less  than  nine  different  sorts  of  dollars  current  in 
China,  five  of  which  are  minted  in  the  country. 
The  dollar  which  is  most  commonly  used,  and 
which  has  the  highest  value,  is  the  Republican 
scale  dollar  minted  in  Mexico.  The  other  foreign 
dollars  in  use  are : 

1.  The  Japanese  yen ; 

2.  The  Spanish  Carolus  dollar; 

3.  The  French  Republic  dollar  (Indo-Chinese  piastra). 

But  none  of  these  are  so  extensively  used  as  the 
Mexican  dollar.  The  Chinese  dollars  are  those 
minted  at 

2  A  369 


1.  Tientsin  Arsenal; 

2.  Kwangtung  Province ; 

3.  Kiangnan; 

4.  Hupeh  Province ; 

5.  Anhui  Province. 

The  subsidiary  coins  are  five  cents,  ten  cents, 
twenty  cents,  and  fifty  cents,  which  are  minted  in 

1.  Kwangtung  Province ; 

2.  Kiangnan; 

3.  Fookien  Province ; 

4.  Hupeh  Province ; 

5.  Anhui  Province. 

The  coins  most  commonly  used  by  the  Chinese 
themselves,  however,  are  copper  cash,  the  nominal 
value  of  which  is,  on  an  average,  \qoo  to  the  dol- 
lar. The  relation  between  the  copper  cash  and 
silver  is  so  important  that  I  can  best  explain  the 
question  by  quoting  the  following  three  questions 
from  the  London  Chamber  of  Commerce  to  the 
Hong  Kong  and  Shanghai  Bank,  and  the  replies 
of  Mr.  C.  S.  Addis,  of  the  branch  at  Shanghai,  to 
these  questions : 

"  Question  i. — Whether  copper  cash  is  issued 
from  the  Mints  in  China  at  higher  rates  since  the 
closing  of  the  Indian  Mints,  or  if  the  increase  in 
value  (alleged  to  have  taken  place)  occurs  after 
issue } 

"  It  is  difficult  to  answer  this  question  in  the 
terms  in  which  it  is  put.  Mints  in  China  are  not 
*  open  '  in  our  sense  of  the  word.  They  are  Gov- 
ernment institutions  which  purchase  copper,  cast 



it  in  coins  of  a  fixed  weight  and  composition,  and 
finally  place  them  in  circulation  through  the  pay 
of  soldiers  and  Government  officials.  They  can- 
not be  said,  therefore,  to  issue  cash  at  either  high- 
er or  lower  rates,  because,  while  the  standard  of 
weight  and  fineness  of  the  coins  is  fixed,  there  is 
no  fixed  ratio  between  copper  cash  and  silver. 

"The  exchange  between  the  two — x>.,  copper 
cash  and  silver — is  determined  by  the  quantity  of 
copper  cash  in  circulation. 

"  The  question  may  be  asked,  however,  if  any 
reduction  has  been  made  since  the  closing  of  the 
Indian  Mints  in  the  weight  and  fineness  of  the 
coins  issued  by  the  Mints  in  China?  The  answer 
is  that  no  such  change  appears  to  have  taken 
place.  How  well  the  standard  has  been  main- 
tained will  be  seen  from  the  accompanying  memo- 
randum by  Dr.  Stuhlmann,  Professor  of  Chemis- 
try at  the  Peking  College,  containing  a  tabulated 
analysis  of  coins  issued  by  the  Pao  Ch'uan  and 
Pao  Yuan  Mints  during  the  present  reign, 

"A  tael  (Kung  Fa  weight)  of  silver  at  present 
prices  would  purchase  sufficient  copper  to  produce 
388  Peking  large  cash,  or  say  yi  tiao  (i  tiao=5o 
large  or  1000  nominal  cash).  At  the  capital, 
where  soldiers  and  Government  officials  receive 
their  pay  at  an  old  commuted  rate  of  14  tiao  to 
the  Government  tael,  copper  cash  may  still  be 
minted  to  a  small  extent,  the  loss  being  borne 
by  the  Imperial  Treasury.  Some  recent  memori- 
als to  the  Throne,  advocating  a  reduction  in  the 



weight  of  the  coins,  met  with  an  unfavorable  re- 
ception from  the  Empress-Dowager,  who  feared  to 
excite  discontent  among  her  soldiery, 

"  As  regards  the  provinces,  there  is  reason  to 
believe  that  the  production  of  copper  cash  during 
the  past  five  years  has  been  almost  entirely  super- 
seded by  the  minting  of  a  subsidiary  silver  coin- 
age. In  1897  the  number  of  these  subsidiary 
coins  issued  by  the  mints  at  Tientsin,  Wuchang, 
Foochow,  and  Canton  was  as  follows : 

50  cent  pieces 214,796 

20        "           31,852,571 

10        "           i7>S92,93i 

S        "           66,921 

"On  the  basis  of,  say,  920  cash  to  the  dollar, 
those  subsidiary  coins  represent  a  substitute  for 

7,608,907,242  copper  cash  of  the  aggregate  value 

of  over  $8,000,000. 

"  Question  2. — What  the  exact  increase  in  value 
amounts  to,  and  the  extent  of  any  fluctuations  that 
may  have  taken  place  ? 

"  The  increase  in  the  value  of  copper  cash  as 
compared  with  silver  since  the  closing  of  the  Ind- 
ian Mints  varies  in  different  parts  of  China. 
Speaking  broadly,  it  may  be  said  to  amount  to 
about  25  per  cent,  as  the  following  Tables  will  show: 

"  The  number  of  cash  which  a  dollar  would  pur- 
chase has  fallen  since  1892. 

Wenchow  from  1,140  to  950 
Shanghai     "      1,050  **   920 

Tungchow    "      i»o75  "   925 


"  The  number  of  cash  which  a  tael  would  pur- 
chase has  fallen  since  1892. 

Central  Szechuan  from  1,600  to  1,150 
Chungking  "      1,700  "  1,080 

Wuhu  "      1,600  "  1,320 

Shantung  "      i»45o  "  1,210 

"  The  variations  observed  in  the  above  figures 
may  be  ascribed  partly  to  the  percentage  of  spuri- 
ous cash  in  circulation  and  partly  to  the  variety 
of  the  taels  in  use  at  the  different  centres. 

"The  following  Table  shows  the  fluctuations 
from  year  to  year  in  the  value  of  the  Peking 
large  cash  (i  tiao=50  large  cash). 

"Number  of  Peking  large  cash  (i  large  =  20 

small  cash)  obtainable  for  one  Kung  Fa  tael  during 

1892  Tiao  14.200  =  710  large  cash 


14    =  700 


13.500  =  675 


13.600  =  680 


12.800  =  640 


12     =  600 


11.500=  550 



"  Number  of  cash  obtainable  in  Shanghai  dui> 


1892  Tls.  I  =  1,400  cash  =  $1,050  cash 



=  1,370   " 





=  1,300   " 





=  1,270   " 





=  1,210   " 





=  1,170   " 





=  1,170   ** 







"  It  will  be  observed  from  the  above  Table  that 
copper  cash,  probably  on  account  of  the  large 
.  number  of  spurious  coins  in  circulation,  command 
a  market  price  considerably  below  their  intrinsic 
value  in  silver.  A  tael  of  silver,  as  has  already 
been  stated,  would  purchase  sufficient  copper  at 
present  prices  to  produce,  if  minted,  388  Peking 
large  cash,  while  550  of  these  cash  would  be  re- 
quired in  exchange  for  a  tael  in  the  open  market. 
There  is  still,  however,  a  substantial  rise  in  value 
of  about  25  per  cent,  to  be  accounted  for. 

"  The  cause  may  be  sought :  first,  in  the  scarcity 
of  cash  due  to  the  cessation  of  coinage  during  the 
past  five  or  six  years ;  second,  in  the  large  quanti- 
ties believed  to  have  been  illicitly  melted  down  for 
the  purpose  of  making  domestic  utensils  instead 
of  using  copper ;  and  third,  to  the  growing  de- 
mands made  upon  an  already  restricted  currency 
by  the  steady  increase  of  population. 

"  Question  3. — Whether  any  fall  in  the  value  of 
(a)  food  grains,  or  (6)  wages,  has  followed  the  rise 
in  the  value  of  copper  cash. 

"Copper  cash  having  appreciated  in  terms  of 
silver  might  naturally  be  expected  to  show  a  simi- 
lar increase  as  regards  food  and  wages.  In  other 
words,  we  should  have  expected  to  find  a  corre- 
sponding fall  in  the  price  of  commodities.  As  a 
fact,  the  exact  reverse  of  this  has  taken  place. 
While  cash  will  purchase  more  silver  than  former- 
ly, they  will  purchase  less  of  other  articles.  The 
purchasing  power  of  cash  has  risen  in  terms  of 



silver  and  fallen  in  terms  of  commodities.  The 
following  Tables  show  the  fluctuations  year  by 
year  of  the  two  staple  articles  of  diet  in  China : 

Average  Price  of  Flour  (native  production)  in  Peking 
1892  per  133^  lbs.  Tls.  2.40  or,  large  cash  1,704 
















































Average  Price  of  Rice  in  Shanghai 
1892  per  2i3i  lbs.  $3.37  or  cash,  3,538 





"  "  3,5" 





"  "  3,414 





"  "  3.467 





"  "  4.189 





"  "  4.714 





"  "  S.823 

"  The  foregoing  figures,  though  drawn  from  two 
cities  only,  may  be  taken  as  typical  of  a  widely 
spread  movement.  There  is  no  reason  to  doubt 
the  correctness  of  the  statement  made  by  Mr. 
Grosvenor  in  his  Report  on  the  trade  of  China  in 
1896,  that  the  general  increase  in  prices  is  univer- 
sally applicable  throughout  the  whole  Empire. 

"  The  question  remains.  How  are  we  to  recon- 
cile  this  upward  movement  of  prices  with  the  ad- 
mitted appreciation  of  copper  cash — why  do  cash 
cost  more  and  buy  less  ? 



"  This  question,  or  something  like  it,  was  ad- 
dressed last  year  by  the  Royal  Asiatic  Society  to 
members  residing  in  different  parts  of  China, 
Some  thirteen  replies  were  received,  covering  a 
great  extent  of  the  Empire  from  north  to  south, 
and  from  east  to  west.  In  a  Report  on  these  pa- 
pers, prepared  by  Mr.  F.  E.  Taylor,  Statistical 
Secretary  to  the  Imperial  Chinese  Maritime  Cus- 
toms, a  variety  of  explanations  have  been  adduced, 
of  which  the  following  is  a  brief  summary: 

"  Increased  population  is  reported  everywhere, 
making  a  greater  demand  upon  products  of  all 
kinds,  while  the  fall  in  the  gold  value  of  silver  has 
stimulated  exports  and  thereby  reduced  the  sup- 
ply circulable  for  the  natives.  The  enormous 
quantities  of  debased  cash  in  circulation  have  also 
contributed  to  send  up  prices.  In  some  districts 
short  crops,  and  in  some  the  extended  cultivation 
of  the  poppy,  are  held  to  be  largely  responsible 
for  the  dearness  of  food.  In  Shangtung  it  is  said 
that  the  cost  of  agricultural  labor  has  been  in- 
creased by  the  immigration  of  laborers  to  West- 
ern Siberia;  Szechuan  complains  of  short  crops, 
poppy  cultivation,  and  export  of  foodstuffs.  From 
Foochow  we  learn  that  the  province  is  poorer, 
owing  to  the  falling  off  in  the  tea  trade,  while 
taxation  is  heavier.  These  attempts  to  explain 
obscure  and  complicated  phenomena  are  interest- 
ing as  far  as  they  go,  but  can  scarcely  be  consid- 
ered conclusive.     Perhaps  the  only  really  logical 

hypothesis  of  the  appreciation  of  cash  in  terms  of 



silver  and  the  depreciation  of  cash  in  terms  of 
commodities  is  that  suggested  by  Mr.  Taylor, 

"  *  That  silver  has  fallen  in  value  as  a  com- 
modity still  deeper  than  debasement  of  the 
coinage  has  forced  down  the  purchasing  pow- 
er of  cash.' 

"  This  still  leaves  open  the  question  of  which 
much  might  be  written  as  to  what  has  lowered  the 
value  of  silver  in  China. 

"  In  conclusion,  apology  must  be  made  for  the 
generally  tentative  character  of  the  information 
presented  in  the  foregoing  pages.  The  statistics 
cited  have  no  pretension  to  more  than  approxi- 
mate accuracy.  In  a  country  like  China,  where 
there  is  nothing  approaching  a  Bureau  of  Statis- 
tics,  such  scraps  of  information  as  are  available 
must  be  taken  for  what  they  are  worth.  It  is 
hoped  that  they  may  be  found  not  without  value 
as  a  means  of  comparison." 

The  memorandum  on  Chinese  copper  cash,  by 
Dr.  Stuhlmann,  of  the  "  Tuan  Wan  Kwan,"  Pe- 
king, to  which  Mr.  Addis  refers,  is  as  follows : 

"  Not  only  has  the  price  of  silver  in  comparison 
with  gold  constantly  fallen  of  late  years,  but  at 
the  same  time,  and  to  a  certain  extent  in  connec- 
tion with  this,  a  depreciation  of  the  former  metal 
as  compared  to  Chinese  copper  coin  has  taken 
place.  In  other  words,  one  receives  to-day  con- 
siderably fewer  cash  for  the  tael  than  a  few  years 



ago.    Thus,  for  instance,  the  rate  of  exchange  for 
the  Peking  tael,  which  in  1893  was  still  13^  to  14 
tiao,has  gradually  fallen  to  10  tiao.  In  spite  of  this, 
the  value  of  copper  coin  has  otherwise  remained 
the  same,  so  that  the  quantity  of  foodstuff,  etc., 
procurable  for  a  tiao  is  not  greater  than  formerly. 
To  what  extent,  then,  a  further  fall  in  the  tael  ex- 
change is  to  be  expected,  should  no  new  factor 
come  in,  may  possibly  be  arrived  at  with  the  help 
of  the  analysis  of  locally  current  cash  comprised 
in  the  following  Table.     I  premise  that  the  first 
and  the  second  columns  of  the  Table  refer  to  the 
so-called  large  Peking  cash,  and  moreover  to  such 
as  have  been  cast  during  the  reign  of  Kuang  Hsu. 
These  are  marked  in  Manchu  characters  with  the 
words  "  Pao  Ch'uan  "  or  "  Pao  Yuan,"  according 
to  whichever  of  the  two  mints  established  here 
they  come  from,  and  they  form  the  greater  portion 
of  the  copper  coin  at  present  circulating  in  Peking. 
The  third  and  fourth  columns  of  the  Table  show 
the  composition  of  the  so-called  small  cash  which 
have  been  struck  here  during  the  same  period,  and 
which,  almost  without  exception,  are  only  current 
in  the  province.     In  the  latter  class  of  coin  there 
appears  to  be  a  much  greater  proportion  of  old- 
time  coins  than  is  the  case  here  in  Peking. 

"  Nevertheless,  the  weight  and  composition  of 
all  these  coins  are,  generally  speaking,  pretty  much 
the  same.  Finally,  the  fifth  column  refers  to  the 
analysis  of  a  cash  coined   during  the  reign   of 

Chien  Lung,  and  this  analysis  was  made  in  con- 



sequence  of  the  view  widely  held  by  the  Chinese 
that  coins  of  that  period  contain  a  considerable 
quantity  of  gold.  It  will  be  seen  from  the  Table 
how  far  this  has  been  confirmed ;  at  any  rate,  in 
so  far  as  concerns  the  pieces  analyzed  by  me.  I 
have  added  these  figures  in  order  to  show  to  what 
extent  coins  of  that  period  differ  from  those  of 
the  present  day. 

"Naturally  a  great  number  of  cash  were  em- 
ployed for  each  analysis,  and  the  figures  quoted 
are  the  average  results  of  several  tests : 

Kuang  Hsu 

Large  Peking 

Small  Peking      _, .     _ 
'       Cash           ChienLung 





Weight  per 





Small  Cash 

Cash      .    . 











Tin  .    .    . 






Gold*    .    . 


A  trace 




Silver    .    . 






Lead     .    . 






Copper  .    . 


SI -935^ 

$6.1 1  fl 


Zinc  .    .    . 






Iron  .    .    . 






Sand,  etc.  . 






Total    .    100.00^    100.00^    100.00^    loo.ooj^    loo.ooj^ 

"As  may  be  seen  from  this  Table,  the  cash 
from  the  two  mints  show  small  differences  in  both 

*  In  no  case  did  the  gold  contained  amount  to  as  much  as  i  oz, 
to  the  English  ton. 



weight  and  composition.  If  we  take  the  mean  of 
the  two,  then  we  get  for  50  large  cash  =  i  tiao,  a 
weight  of  430.08  gramme  =  11.526'  Kuping  Liang 
(i  Kuping  Liang,  or  tael  =  37.31256  gramme  = 
575.82  grains),  containing  52.59  per  cent,  or  6.062 
Kuping  Liang  of  copper,  and  38.55  per  cent,  or 
4.443  Kuping  Liang  of  zinc.  If  we  then  calculate 
the  value  of  the  copper  at  28  taels  per  picul  (= 
1600  Liang),  and  that  of  the  zinc  at  8 J  taels  per 
picul  (the  prices  lately  ruling  here  in  Peking)  we 
have,  omitting  the  other  component  parts,  the 
value  of  the  metals  contained  in  50  cash  as  equal 
to  0.1289  taels.  A  tael  is,  therefore,  only  sufficient 
to  provide  the  necessary  copper  and  zinc  for  388 
large  cash,  or  yi  tiao.  Actually,  however,  as  al- 
ready mentioned,  the  present  rate  of  the  tael  is 
loj  tiao,  and  consequently,  in  spite  of  the  fall  in 
the  past  few  years,  still  considerably  higher  than 
one  could  expect,  for  the  copper  money  purchas- 
able for  a  tael  costs  the  Government,  as  shown 
above,  in  copper  and  zinc,  not  less  than  1.354  taels, 
exclusive  of  the  cost  of  minting.  One  obtains 
similar,  though  not  quite  such  startling,  results 
from  a  calculation  on  the  above  lines  of  the  value 
of  the  small  cash,  which  amounts  to  0.115  taels 
per  100  pieces.  Consequently,  a  tael  is  only  suffi- 
cient to  provide  the  material  for  870  small  cash, 
and  at  the  present  rate  of  1000  cash  to  the  tael  the 
purchaser  receives  an  amount  of  copper  and  zinc 
which  actually  represent  a  metal  value  of   11 50 

taels.    The  interesting  fact  may  be  submitted  that 



at  present  in  Peking — and  as  far  as  I  know,  else- 
where in  China — the  tael,  as  compared  to  the  cop- 
per coinage,  still  possesses  a  more  or  less  imagi- 
nary value.  This  shows  itself  on  the  one  side  by 
the  rapid  depreciation  of  silver  in  relation  to  gold 
that  has  lately  taken  place,  and  on  the  other  side 
by  the  steady  rise  in  copper  prices,  which  two 
movements  of  the  foreign  metal  markets  the  value 
of  the  cash  has  not  to  the  full  extent  followed. 
Nevertheless,  during  the  last  few  years  the  raw 
material,  so  far  as  the  local  coins  are  concerned, 
has  been  principally  drawn  from  Europe  and  Japan. 

"  It  is  therefore  to  be  expected  that  a  further 
fluctuation  in  exchange  in  favor  of  cash  will  take 
place,  and,  indeed,  the  limit  of  that  fluctuation, 
other  considerations  excluded,  may  be  determined 
by  the  cost  of  production  of  the  coins.  A  fall  of 
the  tael  to  350-4CX5  large  (7-8  tiao)  and  850-900 
small  cash  is,  therefore,  within  the  bounds  of  pos- 
sibility. That  in  such  a  complicated  question  many 
other  factors  are  involved  is  evident  from  the  al- 
ready alluded  to  relatively  high  rates  of  exchange 
of  the  small  cash  as  compared  to  the  large  ones, 
and  this  is  explained  by  the  increased  demand  cre- 
ated by  the  Tientsin  Peking  Railway." 

Upon  the  general  question  of  currency  and  ex- 
change I  asked  two  questions,  and  obtained  the 
following  expert  opinion.  The  whole  question  is 
so  difficult  that  I  will  offer  no  opinion  upon  the 
replies,  interesting  as  they  are.  The  questions  I 
asked  were : 



1 .  Is  a  gold  standard  possible  ? 

2.  How  has  the  varying  rate  of  exchange 
aflFected  the  price  of  commodities  ? 

The  answers  I  received  may  be  shortly  sum- 
marized  thus : 

1.  No;  because  the  balance  of  trade  being 
against  China,  it  is  improbable  that  gold  would 
remain  in  the  country. 

2.  The  answer  is,  out  of  six  of  the  princi- 
pal commodities  imported,  prices  have  gone 
up  from  30  per  cent,  to  40  per  cent,  in  five 
instances,  and  declined  42  per  cent,  in  one 
instance,  between  January,  1890,  and  October, 
1898  (the  date  at  which  I  arrived  in  China). 
The  exchange  in  1890  was  4^.  6flt,  and  in 
1898  2s.  Sd.  It  has  also  tended  to  make  the 
Chinese  merchant  more  of  a  commission 
agent  than  a  bonafde  trader. 

To  those  who  are  interested  in  the  questions, 
the  detailed  replies  I  received  are  more  fully  given 
below : 

I.  "The  currency  of  China  is  based  on  silver 
and  copper  cash ;  the  former  at  its  intrinsic  value, 
the  latter  approximately  so.  As  silver  has  during 
recent  years  declined  relatively  to  copper,  ex- 
change between  silver  taels  and  copper  cash  has 
more  or  less  adjusted  itself  to  their  relative  values. 
This  has  been  probably  brought  about  by    two 

causes : 



"  (a)  The  curtailment  of  coinage  of  copper 
cash,  as  the  operation  could  only  be  carried 
on  at  a  loss. 

"  (6)  The  melting  of  cash,  as  the  metal  they 
contained  was  worth  more  than  their  nominal 
value  as  money. 

"The  Chinese  having  been  accustomed  to  a 
standard  of  value  based  upon  silver  at  its  intrinsic 
value,  they  would  probably  look  with  distrust  upon 
any  coinage  which  had  a  fictitious  value ;  as  gold 
and  silver  are  constantly  fluctuating  in  value  in 
relation  to  each  other,  it  is  impossible  to  have  a 
gold  currency  with  subsidiary  silver  coinage  which 
is  not  a  fictitious  value ;  it  is  probable  that  such 
subsidiary  coinage  would  depreciate  or  appreciate 
in  accordance  with  its  intrinsic  value,  unless  it 
were  exchangeable  for  gold  in  all  important  centres. 

The  balance  of  trade,  as  far  as  the  foreign  Cus- 
toms statistics  show,  is  against  China ;  there  is  no 
data  to  show  how  far  the  balance  may  be  redress- 
ed by  the  trade  in  native  vessels  from  Chinese 
ports  to  foreign  countries — such  as  Corea,  Japan, 
Siam,  and  the  Straits,  and  by  native  overland 
trade  to  Thibet,  Central  Asia,  and  Siberia;  the 
loans  recently  floated  by  China  will  virtually  aug- 
ment the  balance  of  trade  against  her,  and  there- 
fore it  is  improbable  that  gold  would  remain  in 
the  country,  even  if  it  could  be  introduced  with 
the  object  of  starting  a  gold  currency,  at  any  rate 
until  Chinese  exports  increased  to  such  an  extent 



that  the  balance  of  trade  were   turned  in   her 

"  The  question  as  to  the  prices  of  commodities 
in  relation  to  exchange  naturally  divides  itself  into 
two  headings — namely: 

"  (a)  Commodities  imported  from  gold  coun- 
tries, and 

"  (6)  Commodities  produced  in  the  country 

"  As  regards  imported  commodities,  prices  here 
must  naturally  conform  to  the  varying  gold  ex- 
change, and  in  the  process  of  adjustment  much  risk 
attaches  to  those  engaged  in  the  trade;  the  reason 
is  plain,  because,  seeing  that  goods  have  to  be 
bought  at  home  for  arrival  here  months  ahead, 
there  is  the  terribly  uncertain  factor  of  the  fluctua- 
tions in  exchange  during  the  interval.  The  fol- 
lowing few  figures  will  show  how  the  declining  gold 
exchange  has  affected  the  prices  of  imported  com- 

Jan.,  1890.    Oct.,  1898.   Per  cent 
Ex.  4s.  6d,     Ex.  2S,  Sd.    Fall  42 



Gray  shirtings .    .     , 



Rise  30 

White  shirtings    . 



"    32 

Woollen  camlets  .     , 

10.20    * 


"    40 

Nail-rod  iron    .    .    , 



"    30 




''    48 

"  Of  course^,  exchange  is  not  the  only  factor  in- 
fluencing prices;  a  very  important  factor  is  the 

price  at  which  goods  can  be  purchased  at  home, 



which,  in  turn,  is  dependent  upon  the  price  of  raw 
material.  For  instance,  first-cost  prices  at  home  of 
cotton  and  woollen  goods,  in  1890,  were  some  20 
per  cent,  higher  than  they  are  to-day. 

"  In  connection  with  the  general  question  of  the 
efiFect  of  a  varying  exchange  upon  trade  as  a  whole, 
there  can  be  no  doubt  that  it  has  largely  influenced 
foreign  traders  towards  endeavors  to  eliminate 
from  their  business,  as  far  as  may  be,  the  specula- 
tive exchange  factor.  Much  has  been  written  about 
the  disappearance  of  the  bona  fide  British  merchant 
in  China — that  is,  a  trader  who  buys  and  sells  on 
his  own  account — it  being  alleged  that  the  trader  in 
China  has  degenerated  into  a  mere  commission 
agent.  The  answer  is  that  the  bona  fide  merchant's 
business  has,  in  consequence  of  varying  exchange, 
become  so  largely  speculative  that  the  careful 
trader  naturally  endeavors  to  minimize  his  risk  by 
getting  a  fAtrdpzity  to  assume  the  risk  of  exchange; 
consequently  his  object  is  to  sell  his  goods  before 
he  buys  them,  whether  in  imports  or  exports. 
Commission  business  is  naturally  the  result.  As, 
however,  the  volume  of  business  constantly  con- 
tinues to  increase,  it  may  be  taken  for  granted 
that,  so  far  as  imports  are  concerned,  our  manu- 
facturers at  home  care  little  whether  we  con- 
duct our  business  on  *  merchant'  or  *  commission' 
lines,  and  it  is  difficult  to  see  where  the  cry  of 
the  degeneracy  of  the  British  merchant  in  China 
comes  in. 

"Another  point  is  that,  business  being   now 

2B  385 


largely  conducted  on  commission  or  '  indent'  lines, 
we  are  at  least  certain  of  supplying  Chinese  with 
what  they  actually  want,  and  not  with  what  we  may 
think  they  want;  our  manufacturers  consequently 
are  obliged,  if  they  accept  our  indents,  to  arrange 
their  machinery  according  to  the  wants  of  the 
market  they  are  supplying ;  this  consideration  has 
an  important  bearing  on  the  oft-repeated  cry  of  the 
want  of  adaptability  of  the  British  manufacturer, 
our  method  of  business  at  least  compels  him  to 
subordinate  his  conservative  ideas  to  our  actual 

"  As  to  the  second  point — viz.,  Commodities  pro- 
duced  in  the  Country^  there  is  no  doubt  that,  con- 
currently with  the  fall  in  silver,  there  has  been  a 
general  rise  in  China's  home  products;  the  fall  in 
silver  has  something  to  do  with  this,  at  any  rate,  so 
far  as  the  prices  of  exported  produce  is  concerned, 
the  Chinaman  being  smart  enough  to  take  advan- 
tage of  the  fact  that  the  depreciated  silver  enables 
the  foreigner  to  pay  more  silver  than  formerly  for 
his  produce,  but  undoubtedly  the  main  reason  for 
the  rise  in  Chinese  commodities,  including  necessa- 
ries of  life,  and  hence  wages  and  general  cost  of  liv- 
ing, is  the  appreciation  of  copper  cash  in  terms  of 
silver.  The  actual  worker  in  China,  whether  in 
field  or  factory,  looks  for  his  wages  in  cash,  and 
whereas  in  1890  a  tael  (i^  oz.  of  silver)  purchased 
1400  cash,  it  now  purchases  less  than  1 200.  Wages 
and  prices  have  therefore,  as  expressed  in  silver, 

advanced  accordingly." 



With  regard  to  the  statement,  in  the  opinion  I 
^  have  quoted  above,  that  the  Customs  returns  show 

a  balance  of  trade  against  China,  this  is  perfectly 
true;  but  other  expert  opinion  I  have  obtained 
states  that  if  the  overland  trade  is  taken  into  con- 
sideration, and  the  movements  of  bullion  are  in- 
cluded with  trade  returns,  it  will  be  found  that  in 
1898  there  was  a  balance  of  six  millions  in  favor 
of  China.  Experts  have  been  known  to  differ  on 
other  occasions.    * 

It  is  beyond  my  power  to  do  more  than  lay 
these  statements  before  the  Associated  Chambers 
of  Commerce,  and  to  leave  them  to  draw  their  own 
deductions  from  them.  I  trust,  however,  that  this 
chapter  will  be  found  useful  to  all  interested  in 
the  subject,  and  that  the  object-lesson  of  the  col- 
lection I  have  brought  to  England  may  be  equally 
instructive  to  the  ordinary  business  man. 

There  is  room  for  very  great  improvement  in 
Chinese  finance  and  currency.  This  is  beyond 
doubt.  The  currency  hinders  trade,  and  is  trouble- 
some to  every  one.  As  an  instance  of  this,  there 
are  no  less  than  five  different  currencies  between 
Tientsin  and  Peking,  a  distance  of  80  miles.  As 
an  example,  the  railway  fare  between  Peking  and 
Tientsin  was  i  dollar  40  cents,  but  from  Tientsin 
to  Peking  it  was  i  dollar  30  cents.  The  remedies 
which  I  would  suggest  for  this  state  of  affairs,  for 
the  consideration  of  the  Associated  Chambers  of 
Commerce,  are  these : 

I.  A  Bureau  of  Finance  to  be  established 



with  a  foreigner  at  the  head  of  it,  as  financial 
adviser  to  the  Chinese  Government. 

2.  The  establishment  of  a  system  of  pub- 
lic accounts  and  audits,  and  reform  in  the  col- 
lection of  internal  taxation  of  all  kinds. 

3.  The  establishment  of  a  Government 
bank  (or  official  status  to  be  given  to  one  of 
the  existing  banking  corporations  in  China). 

4.  The  establishment  of  a  national  mint, 
and  a  uniformity  in  the  coinage  minted  and 
allowed  as  legal  tender  throughout  the  Chi- 
nese Empire. 

5.  The  establishment  of  a  commission  of 
experts  by  China  to  investigate  these  questions, 
and  to  report  how  reforms  should  be  initiated. 

I  feel  confident  that  if  the  Associated  Cham- 
bers of  Commerce  can  do  anything  to  secure  these 
points  being  attended  to,  that  trade  and  commerce 
will  be  beneficially  affected  thereby. 

The  Banks  of  China  at  the  date  of  my  visit  were 
the  following : 

Hong  Kong  and  Shanghai  Banking  Corpo^ 

ration English. 

Chartered  Bank  of  India,  China,  etc.    .     .  " 

Mercantile  Bank  of  India " 

Bank  of  China  and  Japan '^ 

National  Bank  of  China       Chinese. 

Imperial  Bank  of  China ^' 

Yokohama  Specie  Bank       Japanese. 

Deutsch  Asiatische  Bank German. 

Russo-Chinese  Bank Russian. 

Banque  de  Tlndo  Chine French. 




Up  till  now  foreign  trade  in  China  has  been 
checked  and  hindered  less  by  political  changes 
than  by  the  failure  of  the  foreign  merchant  to  se- 
cure all  he  expected  or  was  entitled  to  under  his 
Treaty  rights,  and  by  the  tariffs  illegally  imposed 
on  goods  which  have  already  paid  customs  and 
other  duties  at  the  port  of  entry. 

British  commercial  interests  in  China  have  been 
fostered  by  the  treaties  and  tariffs  she  dictated,  by 
the  energy  of  her  merchants,  and  by  the  possession 
of  the  lead  among  native  competitors  as  well  as 
foreign  rivals.  But  competition  is  telling  adverse- 
ly, the  energy  of  the  British  merchant  is  being 
equalled  by  other  nationals,  the  failure  of  China  to 
keep  strictly  to  the  letter  of  her  treaties,  and  the 
fact  that  the  dictated  treaties  have  not  sufficiently 
considered  both  sides  of  the  case,  are  all  beginning 
to  have  an  effect.  The  competition  of  the  Chinese 
and  the  introduction  of  steam  into  the  country  are 
also  combining  to  produce  changed  conditions  in 
China,  bearing  in  an  important  degree  on  British 
commerce.  The  diligence,  frugality,  and  skill  of 
the  Chinese  make  them  formidable  trade  rivals, 



and  in  order  to  keep  the  preponderance  of  trade 
in  British  hands  it  will  be  necessary  for  both  our 
merchants  and  the  authorities  at  home  to  recog- 
nize these  changes. 

New  markets  must  also  be  sought.  If  the  mer- 
chant finds  that  the  native  workman  is  seriously 
cutting  into  one  branch  of  his  business,  it  is  ad- 
visable that  he  should  try  and  turn  the  activity  of 
his  opponent  into  a  profitable  channel  for  himself 
and  Anglo-Saxon  trade  generally.  New  industries 
must  be  opened  up,  and  I  would  especially  direct 
the  attention  of  the  Chambers  of  Commerce  to 
the  openings  for  glass  factories,  among  others,  of 
which  there  at  present  seems  only  one  in  China, 
and  to  the  fact  that  the  more  the  native  competes 
with  the  British  manufacturer  in  certain  classes  of 
trade  the  more  machinery  he  will  require,  and 
the  orders  for  such  machinery  will  come  to  this 
country  if  our  machinery  manufacturers  are  enter- 
prising enough.  Special  attention  should  also  be 
directed  to  the  variations  in  the  buying  and  sell- 
ing of  goods,  as  there  is  a  great  difference  be- 
tween certain  classes  of  goods  in  which  the  trade 
is  ephemeral  instead  of  permanent.  For  instance, 
dealings  in  cotton  goods  and  teas  will  probably 
go  on  as  long  as  China  lasts,  but  purchases  of  arms 
and  railway  material  are  only  to  supply  temporary 
wants,  and  may  cease  altogether  when  once  China 
is  in  a  position  to  produce  her  own  plant.  At  the 
present  moment,  however,  there  is  a  great  open- 
ing for  railway  material.    Some  of  the  orders  have 



come. to  this  country,  but  at  this  moment  the 
greater  proportion  are  going  to  America.  It  ap- 
pears to  me  that  the  first  necessity  of  the  British 
manufacturer  is  to  study  the  special  requirements 
of  the  China  market,  and  of  these  I  have  given 
some  indication  in  the  chapter  on  "  Tongshan." 

Political  occurrences,  due  to  the  action  of  For- 
eign Powers,  have  affected  trade  much  less  than 
has  been  supposed.  The  steady  growth  in  the  for- 
eign trade  of  China  has,  on  the  whole,  been  main- 
tained. The  Customs  Returns  for  1898  are  not 
yet  public,  but  from  good  authority  I  learn  that 
the  figures  will  be  as  follows : 

Imports  in  Hk.  taels 209,000,000 

Exports    "         " 153,000,000 

Total 362,000,000 

This  shows  an  increase  of  7,000,000  taels  in  im- 
ports, and  a  decrease  in  exports  of  about  10,000,- 
000  on  1897.  This  bears  out  what  I  have  con- 
tinually drawn  attention  to  in  the  course  of  my 
Report — viz.,  that  trade  has  suffered  by  the  want 
of  security  and  the  lack  of  confidence.  The  action 
of  Russia  in  the  North,  Germany  at  Kiao-chow, 
or  France  along  the  Tongking  frontier  has  had 
no  effect,  because  no  markets  have  yet  been  closed 
to  trade  which  were  open  before. 

On  the  contrary,  trade  with  all  these  districts 
has  never  been  really  open,  and  has  only  reached 
them  through  the  hands  of  the  Chinese.  The  ac- 
tion of  these  Powers  has,  therefore,  had  no  effect 



on  the  import  trade  unless  to  increase  it,  by  im- 
proving the  line  of  communication,  and  the  facili- 
ties for  transport.  The  danger  in  this  direction 
is  a  prospective  one,  and  lies  in  the  fact  that  paper 
guarantees  are  not  sufficient  to  assure  the  Brit- 
ish merchant  against  regulations  and  preferential 
tariffs,  which  will  hinder  the  present  steady  de- 
velopment of  his  trade  in  the  near  future.  The 
case  with  regard  to  exports  is  far  different.  The 
foreign  export  trade  is  almost  entirely  in  the 
hands  of  British  merchants,  and  the  feeling  of  un- 
rest throughout  China,  the  disturbances  and  riots, 
and  the  anxiety  of  the  people,  have  arrested  the 
natural  growth  of  the  export  trade.  Goods  have 
been  unable  to  come  down  from  the  interior,  and 
instead  of  the  increase  we  might  reasonably  have 
expected  to  find,  there  is  a  decrease  of  io,cxxd,ooo 
taels  on  the  returns  of  1897,  although  still  an  in- 
crease on  previous  years.  The  wealth  of  China, 
and  the  proof  that  I  am  not  wrong  in  dwelling  so 
much  in  this  Report  on  the  prospective  trade  pos- 
sible, is  very  clearly  demonstrated  by  the  fact  that 
the  total  foreign  trade  has  actually  doubled  itself 
since  1888.  In  my  opinion,  it  will  more  than 
double  even  the  present  figures  in  the  next  decade 
if  China  is  loyally  assisted  by  Foreign  Powers  from 
without,  and  if  she  is  also  prepared  to  undertake 
reforms  within. 

It  is  not  always  wise  to  confound  political  with 
commercial  questions,  but  in  China  the  two  can- 
not be  separated.      Strong  political  influence  at 



Peking  must  have  a  beneficial  effect  on  commer- 
cial relations,  and  a  strong  and  friendly  China  is 
the  best  guarantee  for  whatever  extension  and 
development  are  necessary  for  trade. 

We  cannot,  however,  afford  to  overlook  two 
positive  and  important  facts  if  the  "  Open  Door  " 
policy  is  maintained.  The  most -favored -nation 
clause  of  all  the  treaties  makes  it  impossible  for 
any  country  to  obtain  anything  by  negotiation  for 
her  own  exclusive  benefit,  which  will  not  either  be 
shared  by  all  other  Powers,  or  enable  them  to 
force  a  quid  pro  quo  from  China.  Secret  under- 
standings with  China  are  impossible,  and  any  at- 
tempt to  monopolize  control  in  any  direction  will 
be  opposed  and  neutralized,  if  not  completely 
foiled,  by  the  threats  which  others  will  hold  out 
over  China's  head. 

Thus,  if  Manchuria  remains  Chinese,  preferen- 
tial railway  rates  cannot  be  introduced,  the  Russian 
railway  will  ofiFer  increased  trading  facilities  to  all 
nations,  and  profit  to  Russia  herself.  This  is  ex- 
actly a  case  in  point  where  the  political  question 
is  inseparable  from  the  commercial.  All  that  we 
know  at  present  is  that  Russia  has  been  in  nego- 
tiation with  the  Imperial  Chinese  Customs  for  the 
establishment  of  Chinese  Customs  Houses  all 
along  the  line  of  her  railway.  Germany,  also,  at 
Kiao-chow,  has  consented  to  allow  a  Chinese 
Customs  House  to  be  established  at  that  place. 

The  object  of  all  treaties  made  between  Great 
Britain  and  China  has  been  to  promote  trade ;  but 



the  Chinese  provincial  authorities,  owing  to  their 
more  or  less  independent  position,  have,  in  many 
cases,  succeeded  in  nullifying  the  efifect  of  these 
treaties,  and  by  illegal  and  vexatious  tarifiFs  on 
goods  en  route  to  the  interior  have  caused  both 
delay  and  loss  to  British  trade. 

The  Imperial  Chinese  Maritime  Customs,  under 
the  able  control  of  Sir  Robert  Hart,  levies  an  ad 
valorem  duty  on  all  foreign  goods  landed  in  China. 
This  duty  amounts  to  only  5  per  cent,  and  as 
China's  Treaty  with  Great  Britain  regarding  the 
Customs  Tariff  is  about  to  expire,  China  has  an- 
nounced her  intention  of  asking  for  an  increase  of 

The  British  merchants  in  China  do  not  object 
to  an  increase  in  the  ad  valorem  duty,  because  it 
gives  them  an  opportunity  of  raising  the  whole 
question  of  taxation  on  foreign  trade,  and  an  op- 
portunity of  getting  the  present  abuses  remedied. 
As  they  justly  observe,  a  slight  increase  in  taxation, 
levied  at  the  port  of  entry,  will  be  less  injurious  to 
trade  than  the  uncertainty  of  the  taxation  levied 
on  goods  and  the  delay  caused  in  transit  by  pro- 
vincial authorities. 

The  principal  treaties  under  which  British  trade 
with  China  is  conducted  are  as  follows : 

I.  Treaty  of  Nanking  ....     1842 

II.  Tientsin  Treaty 1858 

III.  Chefoo  Convention      .     .     .     1876 

In  addition  to  this  there  is  the  Customs  Tariflf 



itself,  to  which  China  and  Great  Britain  are  con- 
tracting parties.     The  rights  and  privileges  theo- 
retically conceded  under  these   treaties   have,  in 
many  instances,  been  withheld  for  thirty  years. 
These  privileges  are  as  follows : 


The  Nanking  Treaty  of  1842  provided  that 
"  When  British  merchandise  shall  have  once  paid 
at  any  of  the  said  ports  (Treaty  Ports)  the  regu- 
lated customs  and  dues,  agreeable  of  the  tariflf  to 
be  hereafter  fixed,  such  merchandise  may  be  con- 
veyed by  Chinese  merchants  to  any  province  or 
city  in  the  interior  of  the  Empire  of  China  on 
paying  a  further  amount  as  transit  duties,  which 

shall  not  exceed per  cent,  on  the  tariff  value 

of  such  goods."  Article  X. —  Treaty  of  Nan- 

This  Treaty  is  perfectly  clear.  It  provides  that 
British  merchandise  may  be  admitted  to  Treaty 
Ports  on  payment  of  the  tariff,  and  to  the  interior, 
in  the  hands  of  Chinese  merchants,  by  an  addi- 
tional tax  as  transit  duty,  the  percentage  for 
transit  duty  being  apparently  left  open  for  several 

The  original  intention  of  the  framers  of  this 
Treaty  was  to  secure  free  entry  of  British  goods 
to  the  ports  opened  to  trade  under  Article  II.  of 
the  same  Treaty,  and  to  allow  them  to  be  im- 
ported into  the  country  not  open  to  foreign  trade 



by  a  further  payment.  In  course  of  time,  how- 
ever, the  Chinese  began  to  take  advantage  of  the 
fact  that  duties  other  than  these  two  were  not  ex- 
pressly forbidden,  and  in  1858  the  whole  question 
was  thoroughly  gone  into  and  a  new  Treaty  was 
signed,  which  may  be  said  to  be  the  Magna 
Charta  of  the  British  merchant  in  China.  This 
was  the 


This  Treaty  covers  a  very  wide  field  connected 
with  the  rights  and  privileges  of  foreign  trade,  but 
the  clause  with  which  we  are  most  concerned  is 
that  known  as  Article  XXVIII. 

This  commences  that  "  Whereas  it  was  agreed 
under  Article  X.  of  the  Treaty  of  Nanking  that 
British  imports  having  paid  the  tariff  duties  should 
be  conveyed  into  the  interior  free  of  all  further 
charges^  except  a  transit  duty."  And  then  goes  on 
to  describe  how  British  merchants  had  complained 
that  the  duty  not  having  been  stated,  charges  were 
suddenly  and  arbitrarily  imposed  by  local  officials, 
and  therefore — 

"  It  shall  be  at  the  option  of  a  British  subject 
desiring  to  convey  produce  purchased  inland  to  a 
port^  or  to  convey  imports  from  a  port  to  an  inland 
market,  to  clear  his  goods  of  all  transit  duties  by 
payment  of  a  single  charged 

The  Article  goes  on  to  state  that  this  charge 
is  to  be  levied  at  the  first  barrier  passed  by  ex- 
ports proceeding  to  the  sea,  or  on  imports  going 



inland  at  the  port  where  they  are  landed.  It  also 
provides  that  this  duty  or  "  single  payment "  shall 
not  exceed  2j  per  cent,  on  the  value  of  the  goods, 
and  provides  that: 

"  On  payment  thereof  a  certificate  shall  be  is- 
sued which  shall  exempt  the  goods  from  all  further 
inland  charges  whatsoever^ 

There  could  be  no  possible  misunderstanding 
in  this  plain  language.  It  was  clear  that  two 
duties  only  need  be  legally  incurred  by  foreign 

1.  The  ordinary  Customs  duty. 

2.  The  transit-pass  fee,  which  was  to  cover 
all  goods  whether  going  to  or  from  a  port. 

To  set  the  point  beyond  cavil,  however,  the  fol- 
lowing extract  from  a  despatch  of  Lord  Elgin  (the 
framer  of  this  Treaty)  to  the  Foreign  Office  in 
November,  1858,  may  be  quoted: 

"  Henceforth,  on  payment  of  a  sum  in  name 
of  transit  duty,  goods,  whether  of  export  or 
import,  will  be  free  to  pass  between  the 
port  of  shipment  or  entry  to  or  from  any 
part  of  China  without  further  charge  of  toll, 
octroi,  or  tax  of  any  description  whatsoever. 
I  confess  that  I  consider  this  a  most  impor- 
tant point  gained  in  the  future  interest  of  for- 
eign trade  with  China.  I  have  always  thought 
that  the  remedy  (against  the  grievance  pressed 
upon  mc  by  mercantile  bodies  or  individuals 



since  I  came  to  China)  was  to  be  sought  in 
the  substitution  of  one  fixed  payment  for 
the  present  irregular  and  multiplied  levies, 
....  although  it  was  obviously  difficult  to 
devise  a  scheme  for  the  commutation  of  tran- 
sit {i.e.y  inland)  duties  which,  without  creating 
great  financial  disturbance,  should  prove  an 
efifectual  protection  to  the  importing  and  ex- 
porting merchants." 

In  spite  of  this,  as  years  went  on,  the  Chinese 
officials,  with  undiminished  perseverance,  con- 
tinued to  try  and  impose  various  additional  taxes 
under  specious  pretexts  and  different  names,  the 
principal  of  these  being  a  tax  known  as  likin,  and 
which  was  not  only  illegal  but  was  a  great  source 
of  hindrance  to  trade,  as  the  merchant  never  knew 
what  the  amount  of  the  likin  might  be.  The  great 
difficulty  also  was  that,  as  goods  were  entirely  in 
the  hands  of  Chinese  compradors  in  transit,  the 
Chinese  were  naturally  less  able  to  resist  the 
squeeze,  than  if  the  goods  had  been  under  the 
control  of  a  foreigner  when  the  tax  was  charged. 

In  1868  Sir  Rutherford  Alcock,  the  British 
Minister  at  Peking,  took  the  matter  in  hand,  and 
in  a  despatch  which  he  wrote  to  the  Foreign  Office 
he  said : 

**  China  has,  by  her  treaties,  foregone  all 
further  right  of  taxation  on  whatever  can  be 
shown  to  constitute  the  foreign  trade,  import 
or  export.     The  likin  continues  a  violation  of 



treaty  rights.  .  .  .  This  question  of  the  as- 
sumed right  of  the  Chinese  Government  to 
tax  foreign  trade  ad  libitum  is  one  of  principle, 
and  of  such  vital  moment  to  the  interests  of 
commerce  that  a  British  Minister  can  have 
no  discretionary  power  in  protesting  against 
it  as  a  violation  of  treaty." 

Sir  Rutherford  also  drew  up  a  Convention,  in 
1868,  which  was  intended  to  clear  up  the  whole 
question ;  for  while  the  Tientsin  Treaty,  as  quoted 
above,  very  clearly  stated  that  it  was  ^' ai tke  option'^ 
of  a  British  merchant  to  clear  his  goods  by  one 
payment  of  transit  duty,  the  weak  point  in  the 
clause  was  that  which  ordered  that,  upon  the  ap- 
plication of  the  Consul,  the  duty  between  the  port 
and  any  place  in  the  interior  should  be  published 
in  Chinese  and  English  for  the  benefit  of  the  mer- 
chants  at  large.  In  other  words,  it  permitted  the 
provincial  authorities  to  still  levy  duties  on  goods 
en  route  as  long  as  the  duties  were  notified  to  the 
British  Consul,  and  it  only  gave  the  merchant,"  an 
option  "  to  clear  his  goods  from  such  duties  by 
paying  for  a  transit  pass  or  certificate. 

Sir  Rutherford  Alcock's  Convention  was  in- 
tended to  clear  up  this  point,  and  to  make  it  im-. 
perative  that  there  should  be  a  simultaneous  pay- 
ment of  duty  and  all  dues  on  imports  at  the  time 
of  landing,  and  their  subsequent  exemption  from 
all  further  taxation,  in  the  Treaty  Port  provinces. 
Unfortunately,  this  Convention  was  never  ratified, 



but  it  undoubtedly  was  the  solution  of  the  diffi- 
culty, as  while  provincial  officials  are  allowed  to 
levy  likin  at  all,  they  will  do  so  as  they  do  now, 
whether  the  goods  have  paid  transit-pass  dues  or 
not.  If  those  in  charge  of  the  goods  covered  by 
a  transit  pass  refuse  to  pay  this  illegal  exaction, 
they  have  to  submit  to  detention  and  delay,  which 
is,  in  the  long  run,  as  costly  to  the  merchant  as  if 
he  paid  the  illegal  squeeze  imposed  by  the  officials. 
The  present  Inspector-General,  Sir  Robert  Hart, 
talked  the  matter  over  with  me,  and  he  was  of 
opinion  that  the  provision  I  have  quoted  in  the 
unratified  Alcock  Convention  was  a  good  one,  and 
"that  it  will  only  be  by  an  understanding  of  a 
similar  nature  that  any  transit  system  will  ever  be 
made  to  work  well." 

The  efforts  of  Sir  Rutherford  Alcock  having 
proved  abortive,  the  abuses  continued  to  flourish 
and  increase.  Trade  was  hampered,  and  the  mer- 
chants continually  complained.  The  most  com- 
mon complaint  was  that,  ignoring  the  terms  of 
Treaties,  the  provincial  officials  steadfastly  re- 
fused to  recognize  the  rights  of  Chinese  merchants 
to  carry  goods  under  the  transit-pass  system.  The 
result  of  this  was  to  restrict  the  expansion  of  trade 
with  all  parts  other  than  Treaty  Ports.  Another 
Convention  was  drawn  up  to  settle  this  point,  and 


Section  3  of  Article  IV.  enacted  that: 

"The  Chinese  Government  agree  that 
Transit  Duty  Certificates  shall  be  framed  un- 
der one  rule  at  all  ports,  no  difiference  being 
made  in  the  conditions  set  forth  therein  ;  and 
that,  so  far  as  imports  are  concerned,  the  na- 
tionality of  the  person  possessing  and  carrying 
these  is  immaterial.  Native  produce  carried 
from  an  inland  centre  to  a  port  of  shipment, 
if  bona  fide  intended  for  shipment  to  a  foreign 
port,  may  be,  by  treaty,  certified  by  the  Brit- 
ish subject  interested,  and  exempted  by  pay- 
ment of  the  half  duty  from  all  charges  demand- 
ed upon  it  en  route.  If  produce  be  not  the 
property  of  a  British  subject,  or  is  being  car- 
ried to  a  port  not  for  exportation,  it  is  not  en- 
titled to  the  exemption  that  would  be  secured 
it  by  the  exhibition  of  a  transit  duty  certifi- 
cate. The  British  Minister  is  prepared  to 
agree  with  the  Tsung-li  Yamen  upon  rules 
that  will  secure  the  Chinese  Government 
against  abuse  of  privilege  as  affecting  pro- 
duce. The  words  nei-ti  (inland)  in  the  clause 
of  Article  VII.  of  the  Rules  appended  to  the 
tariff,  regarding  carriage  of  imports  inland 
and  of  native  produce  purchased  inland,  ap- 
ply as  much  to  places  on  the  sea  coasts  and 
river  shores  as  to  places  in  the  interior  not 
open  to  foreign  trade;  the  Chinese  Govern- 

2C  401 


ment  having  the  right  to  make  arrangements 
for  the  prevention  of  abuses  thereat." 

Article  VIL,  appended  to  the  Customs  Tariff, 
is  equally  plain.  As  to  imports  it  says,  on  the 
transit  certificate  being  issued  "no  further  duty 
will  be  leviable  upon  imports  so  certificated,  no 
matter  how  distant  their  place  of  destination." 
The  regulations  of  this  Article  as  to  exports,  how- 
ever, are  a  direct  contravention  of  the  Treaty  of 
Tientsin,  for,  instead  of  providing  for  the  payment 
of  transit  dues  at  the  first  barrier  which  the  goods 
pass,  it  provides  that  they  shall  only  be  examined 
there,  and  the  transit  duty  be  paid  at  the  last  bar- 
rier before  arrival  at  the  port  of  destination.  This 
rather  left  the  door  open  to  the  provincial  authori- 
ties to  "  squeeze  "  the  goods  en  route,  as  they  could 
say  that  no  duty  had  been  paid.  Another  harass- 
ing condition  in  this  same  rule  is  that  "unauthor- 
ized sale  in  transitu  of  goods  that  have  been  en- 
tered as  abovci  or  a  part,  will  render  them  liable 
to  confiscation." 

The  effect  of  this  regulation  was  to  prevent  the 
merchant  taking  advantage  of  any  opportunity  of 
selling  his  goods  en  route,  and  any  accident  or  loss 
of  part  of  the  cargo  in  transitu  gave  the  local  offi- 
cials an  unequalled  opportunity  of  inflicting  heavy 
penalties  on  the  merchant.  For  instance,  about 
a  year  ago  an  American  merchant  at  Wuchow 
shipped  2000  cases  of  kerosene  oil  to  Kweilin  un- 
der transit  pass,  but  on  arrival  at  a  barrier  near 



Kweilin  it  was  discovered  that  the  cargo  was  short 
of  twenty  cases  mentioned  on  the  pass.  It  is  more 
than  probable  that  the  local  likin  officials,  who 
are  up  to  all  sorts  of  tricks,  had  arranged  to  have 
these  twenty  casks  stolen,  for  on  arrival  at  the  bar- 
rier near  Kweilin  they  seized  the  cargo  and  impris- 
oned the  Chinese  supercargo,  on  the  ground  that, 
these  twenty  casks  being  missing,  the  whole  cargo 
would  be  confiscated  for  violation  of  Rule  7. 
Months  passed  before  a  settlement  was  arrived  at, 
the  merchant  losing  a  contract  for  120,000  cases 
of  oil  owing  to  the  delay,  besides  having  to  pay  a 
heavy  sum  as  demurrage  to  the  owners  of  the 
native  junks  he  had  employed. 

The  consequence  of  this  and  similar  cases  was 
that  in  1898,  not  long  before  my  visit,  a  new  set 
of  Transit  Pass  Rules  had  been  promulgated  by 
arrangement  between  the  Tsung-li  Yamen,  the 
Inspector- General  of  Customs,  and  the  foreign 
Ministers.  I  append  a  copy  of  these  Rules  for 
the  information  of  the  Associated  Chambers,  and 
for  the  benefit  of  merchants  who  are  contemplat- 
ing catering  for  the  China  market : 


I.  Certificated  imported  goods  going  from 
a  Treaty  port  to  any  inland  place  duly  speci- 
fied shall  be  free,  after  payment  of  a  half  duty 
for  transit  pass,  from  further  taxation  of  any 
kind.  *  • 



2.  On  arrival  of  the  goods  at  the  place 
of  destination  the  certificate  shall  be  can- 

3.  If  the  entire  quantity  of  goods  duly  cer- 
tificated are  sold  while  en  route  to  a  stated 
destination,  then  the  certificate  must  be  can- 
celled at  the  barrier  where  the  goods  are  sold. 

4.  Should  the  entire  quantity  of  certifi- 
cated goods  not  be  sold,  but  only  a  portion 
be  sold,  on  the  remainder  reaching  the  next 
barrier  the  quantity  and  description  of  the 
goods  sold  and  the  place  where  the  sale 
took  place  must  be  reported  by  the  merchant 
to  the  Likin  Office,  whereupon  the  official 
in  charge  of  the  Likin  Office  will  make 
an  endorsement  on  the  certificate  under  his 
seal  of  office,  and  the  balance  of  the  goods 
will  be  allowed  to  pass  without  delay. 

5.  Clear  and  strict  instructions  must  be 
issued  to  the  officials  in  charge  of  the  barriers 
nearest  the  port  whence  goods  are  despatched 
inland  that  they  must  not  allow  certificates 
duly  stamped  by  them  to  pass  goods  a  second 

6.  If  on  examination  it  be  found  that  certi- 
ficates are  being  used  a  second  time,  the  goods 
specified  by  them  will  be  confiscated. 

I  am  well  aware  that  none  of  this  information 

is  new  to  the  Associated  Chambers  nor  to  the 

China  Merchants,  but,  in  view  of  the  forthcoming 




revision  of  the  TariflF,  I  have  thought  it  wise 
to  shortly  summarize  the  whole  question  of  our 
Treaty  rights  from  1842  down  to  the  present  day, 
and  so  to  place  the  exact  position  of  afifairs  before 
business  men  who  have  not  time  to  turn  up  trea- 
ties and  regulations  to  verify  important  points. 

With  regard  to  the  new  rules,  excellent  as  they 
are,  I  agree  with  the  Inspector-General  that  no 
satisfactory  settlement  of  this  much -vexed  ques- 
tion will  ever  be  arrived  at  till  it  is  made  a  neces- 
sary condition  of  foreign  trade  with  China  that  all 
taxes  on  goods  imported  or  exported  on  behalf  of 
foreigners  shall  be  levied  at  one  place,  the  port  of 
arrival  in  the  case  of  imports,  and  the  port  of  de- 
parture in  the  case  of  exports,  and  to  secure  this 
China  must  make  it  illegal  for  any  duties  to  be 
collected  en  route  under  any  pretext  whatever. 


The  principal  illegal  taxes  at  present  collected 
on  goods  in  transitu  are  Likin  (a  sdrt  of  provincial 
Customs  due  levied  in  every  province,  and  some- 
times in  nearly  every  district  of  a  province),  Ching- 
fui  (or  Defence  tax),  the  Haikow,  and  the  Loti- 
Shui  (or  Destination  tax). 

The  likin  tax  is  said  to  have  originated  owing 

to  the  necessity  to  raise  money  after  the  Taiping 

rebellion.     The  whole  object  of  it  appears  to  be  to 

squeeze  the  poor,  the  weak,  and  the  enterprising. 

It  is  an  effectual  bar  to  the  extension  of  trade. 



No  sooner  is  a  new  trade  route  opened  than  likin 
exactions  are  imposed,  and  in  every  province  it  is 
merely  an  excuse  for  tyranny  and  extortion.  Ille- 
gal as  it  is,  when  levied  on  foreign  goods  under 
transit  pass,  it  is  curious  to  find  both  the  British 
and  German  Governments  giving  the  tax  a  legal 
status  by  accepting  seven  Likin  Collectorates  as 
collateral  security  for  the  last  Anglo-German  loan. 
The  seven  collectorates  are  as  follows : 

Salt  Collectorates. 

^^^^^S  I Province  of  Hupeh. 

Hankow  ) 

Tatung  (Wuhu)   ....         "         "    Anhui. 

General  Cargo. 

Kiukiang "         "   Kiangsi. 


Sung-Hu  (Shanghai)      .     .        "         "         " 
Eastern  part  of  province,  Chihkiang. 

Collection  is  estimated  at  five  million  taels  per 

The  likin  is  not  only  a  hinderance  to  trade,  but 
also  causes  most  wasteful  expenditure  of  men  and 
money.  Only  about  one-fifth  of  the  amount  col- 
lected ever  reaches  the  authorities,  and  to  avoid 
the  tax  coolies  are  employed  to  carry  goods  miles 
round  a  likin  barrier,  which  delays  traffic. 

The  Native  Customs  House  working  alongside 
the  Imperial  Maritime  Customs  is  a  great  anom- 
aly.    It  hinders  trade  by  enabling  heavy  charges 

to    be   levied   on    Chinese   merchants  who  have 



bought  goods  from  the  foreigner  which  have  al- 
ready paid  all  legitimate  dues.  It  is  from  begin- 
ning to  end  a  bad  system,  and  foreign  trade  suffers 
less  by  the  amount  levied  upon  it  in  going  up  or 
coming  down  country  than  it  does  by  the  intol- 
erable delays  and  difficulties  which  this  system 

The  British  merchants  drew  my  attention  to  the 
fact  that  these  duties,  illegally  levied,  checked  the 
import  trade,  and  often  caused  serious  loss  in  the 
export  trade.  A  merchant  in  China  undertakes 
to  deliver  in  London  a  certain  quantity  of  goods 
by  a  certain  date.  The  merchant  is  compelled  to 
deliver  or  to  pay.  The  fact  of  the  rate  of  ex- 
change being  against  him,  when  the  time  comes 
for  him  to  deliver,  is  one  unavoidable  cause  of  loss, 
but  when  there  is  added  to  this  the  heavy  sums 
he  has  to  pay  to  the  Likin  Collectorates  to  get  his 
goods  in  time  to  deliver,  it  will  be  seen  how  serious 
a  matter  it  is. 

At  several  places  the  merchants  pointed  out  to 
me  that  the  officials  know  very  well  that  the  mer- 
chant must  have  his  goods  delivered  by  a  certain 
time,  and  so  they  ignore  the  transit  pass,  and  the 
supercargo  has  either  to  pay  the  squeeze  demanded 
or  suffer  months  of  delay.  News  is  a  long  time 
reaching  the  coast.  The  Consul  protests,  and 
orders  are  sent  to  release  cargoes.  Total  deten- 
tion runs  into  months.  Next  time  the  Chinese  in 
charge  of  goods  pay,  to  avoid  delay.  British  mer- 
chants pay  it  either  in  increased  freight,  if  price 



of  goods  IS  already  settled,  or,  if  not,  in  increased 
price.  If  contract  has  been  made  for  forward  de- 
livery at  a  fixed  price,  this  seriously  affects  the 
margin  of  profit  The  merchants  intend  to  press 
for  indemnity  if  the  present  system  continues. 
They  claim  that  the  present  way  of  getting  an 
apology  from  the  Taotai  is  of  no  use.  The  only 
way  to  deal  with  the  Chinese  authorities  in  such 
cases  is  to  attack  their  pockets.  It  is  of  no  use 
for  the  merchant  to  take  the  case  before  his  Con- 
sul, because  there  is  great  difficulty  in  getting  the 
Chinese  compradors  and  supercargoes  to  give  evi- 
dence before  the  Taotai.  If  they  give  such  evi- 
dence, the  Likin  Offices  pass  the  word  along  the 
line,  and  the  Chinese  comprador  finds  himself  boy- 
cotted when  he  next  goes  up  country  for  goods. 
The  remedy  the  British  merchants  suggest  is  that 
when  a  cargo  has  been  delayed  for  weeks  at  likin 
barriers,  despite  the  transit  pass  which  covers  it, 
the  Consul  should  be  authorized  to  fine  the  local 
official,  and  remit  the  fine  to  the  Imperial  Mari- 
time Customs.  The  merchants  claim  that  if  this 
system  was  inaugurated  the  present  squeezes 
would  soon  be  stopped,  as  the  Peking  authori- 
ties would  take  care  the  local  mandarin  paid  the 
fine,  which  would  go  to  swell  the  receipts  of  the 
Imperial  Chinese  Customs;  on  the  other  hand, 
the  local  Taotai  would  be  less  supine,  having  an 
interest  in  finding  and  punishing  the  ofifenders,  in 
order  to  recover  the  sum  by  which  he  was  out  of 




Sometimes  the  officials  refuse  to  issue  transit 
passes  for  frivolous  reasons.  A  Mr.  Morrison 
applied  to  Mr.  Brenan,  Consul-General  at  Shang- 
hai, some  six  weeks  before  I  left  China,  for  a  transit 
pass  for  sheepskins.  The  Taotai  refused  to  grant 
this,  giving  no  better  reason  than  that  such  busi- 
ness was  a  novelty.  Mr.  Brenan  sent  in  a  bill  to 
the  Taotai  for  actual  damages  for  delay  and  loss 
of  time.  To  give  the  Taotai  a  lesson,  Mr.  Morri- 
son should  be  allowed  to  claim  moral  and  indirect 
damages  as  well,  which  should  amount  to  looo 
taels  rather  than  icxd  taels.  This  sort  of  thing 
puts  enterprising  merchants  ofif,  whereas  if  Mr. 
Morrison  received  encouragement  and  succeeded, 
it  would  benefit  and  stimulate  trade  and  commerce. 

The  transit-pass  system  cannot  be  said  to  be  an 

"  utter  failure,"  as  the  facts  reported  in  the  chapter 

on  "  Chinkiang  "  will  show.     The  new  rules  have, 

no  doubt,  done  a  good  deal  towards  stimulating 

this  system,  but  much  still  remains  to  be  done. 

We  have  only  ourselves  to  blame  for  the  troubles 

which  have  arisen.    The  text  of  the  treaties  was 

clear,  but  the  British  Board  of  Trade  gave  away 

our  case  by  admitting  the  destination  tax  to  be 

legal   30  years  ago;    while  Sir  Thomas  Wade, 

when  Minister  at  Peking,  actually  laid  down  the 

extraordinary  dictum  as  to  likin  that  '*  it  was  not 

legal  within  foreign   settlements,"  implying  that 

it  was  legal  outside.     The  whole  wording  of  the 

treaties  as  to  transit -pass  dues  contravenes  this, 

giving  an  exactly  opposite  decision. 



The  French  have  made  a  much  better  stand, 
and  their  action  has  benefited  British  trade  in  the 
South.  Of  late  years,  however,  the  British  Lega- 
tion at  Peking  have  directed  their  efiforts  to  pro- 
tecting British  interests  on  this  question,  and  the 
good  effect  of  their  action  is  now  being  felt. 

Of  the  other  taxes,  the  "  Loti  Shui "  is  probably 
the  most  obnoxious.  It  is  generally  farmed  out 
to  some  official  whose  interest  it  is,  therefore,  to 
get  as  much  as  he  can.  Although  described  as  a 
destination  tax,  it  is  also  very  often  imposed  as  a 
growers'  tax. 

The  taxes  levied  on  exports  are  the  greatest 
possible  evils  to  Chinese  products.  The  tea  trade 
has  been  nearly  crushed  out,  and  taxation,  com- 
bined with  the  deterioration  which  necessarily 
follows  in  cultivation,  is  destroying  it.  If  foreign 
capital  came  to  its  assistance  and  better  methods 
of  cultivation  were  introduced,  it  might  still  stand 
a  chance.  Russia  is  now  attempting  to  cultivate 
Chinese  tea  in  the  southern  parts  of  her  Empire, 
and  some  thousands  of  coolies  have  been  deport- 
ed to  Russia  to  assist  in  starting  the  cultivation. 
Most  of  them,  I  was  told,  went  from  the  district 
around  Hankow,  which  is  the  great  tea  centre. 
Silk  has  also  suffered  from  taxation,  and  Japan 
is  now  actively  competing  with  China  in  this 
branch ;  while  the  taxation  placed  upon  the  cotton 
grower  is  slowly  but  surely  killing  that  industry 

Although  these  taxes  are  paid  by  the  Chinese, 



they  are  all  subjects  for  the  Associated  Chambers' 
attention,  as  taxation  which  injures  and  reduces 
the  productive  capabilities  of  a  country  affects  not 
only  the  natives  of  that  country,  but  all  foreign 
merchants  trading  with  it 

One  of  the  harassing  taxes  in  China  which  pre- 
vents and  retards  the  expansion  of  trade  is  the 
tax  imposed  on  their  own  domestic  trade — viz.,  a 
duty  of  2^%  ad  valorem  on  all  goods  passing  from 
one  port  in  China  to  another  port. 

The  salt  monopoly  is  another  of  the  taxes 
which  requires  to  be  reformed  if  China  is  to  pros- 
per. At  present  it  presses  very  hardly  on  the  poor- 
er classes,  and  is  a  drag  on  the  natural  resources 
of  the  country.  In  other  parts  of  the  Report  I 
have  given  instances  where  the  inhabitants  of 
fishing  towns  actually  imported  salted  fish  as  an 
article  of  diet,  as  it  was  cheaper  than  salting  the 
fish  they  caught  themselves.  Salt  is  a  necessity 
of  life,  particularly  in  Eastern  countries,  and  while 
it  may  legitimately  be  made  a  source  of  revenue  if 
so  desired,  no  one  can  doubt  that  its  taxation,  if 
in^properly  administered,  is  a  great  hardship  to 
the  people.  The  reform  in  Eg)rpt  in  this  depart- 
ment might  be  well  imitated  in  China. 

The  land  tax  is  constantly  complained  of  by 
both  foreigners  and  Chinese.  In  any  revision  of 
the  tariff  the  reform  of  this  tax  will  be  asked  for 
by  the  foreign  communities. 

There  are  two  sides  to  every  question,  and  be- 
fore entering  into  the  question  of  tariff  revision  I 



should  like  to  say  a  few  words  upon  the  Chinese 
side  of  this  question. 

The  difficulties  in  the  way  of  reform  lie  chiefly 
in  the  fact  that  the  provincial  Governments  must 
have  revenue  from  some  source  or  other,  and  you 
cannot  hope  to  suddenly  suspend  indirect  taxa- 
tion which  the  people  are  accustomed  to,  and  re- 
place it  by  direct  taxation,  as  would  appear  to  be 
necessary  if  likin  and  other  octroi  are  abandoned. 
The  provincial  Governments  rely  chiefly  upon 
likin  for  their  revenue,  and  although  the  Chefoo 
Convention  authorizes  Chinese  purchasers  to  take 
out  transit  passes  to  cover  goods,  the  authorities, 
who  see  their  revenue  disappearing,  look  upon  the 
Chinese,  not  as  making  use  of  a  treaty  right,  but 
as  abusing  it  to  evade  the  payment  of  Chinese 
taxes.  This  is  one  of  the  matters  in  which  a 
proper  appreciation  of  Chinese  official  needs  must 
be  shown  before  the  arrangements  can  be  expected 
to  work  smoothly  and  without  friction. 

Another  point  is  that,  at  present.  Canton  sugar 
goes  to  Hong  Kong  in  native  junks,  and  is  thence 
sent  in  foreign  bottoms  to  treaty  ports,  claiming 
transit  privileges  as  having  acquired  a  foreign 
character.  This  is  regarded  as  an  abuse  of  tran- 
sit rights,  and  native  officials  proceed  to  make 
difficulties  for  the  whole  transit  system.  Revision 
and  fuller  definitions,  coupled  with  consideration 
for  China's  financial  necessities,  may  put  the  transit 

pass  system  on  a  proper  and  workable  basis. 




The  request  of  China  for  a  revision  of  the  tariff 
is  complicated  by  the  fact  that  all  the  treaties  do 
not  expire  together.  To  protect  the  British  mer- 
chant, it  may  be  necessary  for  the  Associated 
Chambers  to  see  that  whatever  is  done  in  this  di- 
rection is  done  by  all  the  Powers  together. 

Neither  the  Anglo-Saxon  nor  other  foreign  mer- 
chants appear  to  object  to  any  increase  in  the  tar- 
iffs, provided  greater  facilities  for  trade  are  granted, 
and  necessary  reforms  in  the  fiscal  system  are  given 
as  a  quid  pro  quo.  The  merchants  and  Chamber 
of  Commerce  with  whom  I  discussed  this  question 
expressed  themselves  in  different  ports  in  China 
to  be  willing  to  consent  to  an  increase  of  the  pres- 
ent duty  from  5  per  cent,  to  10  per  cent,  12  per 
cent,  or  even  15  per  cent  all  round,  but  if  in- 
creased to  this  extent  they  hold  that  the  transit- 
pass  dues  should  be  done  away  with,  and  that  all 
merchandise,  having  paid  duty  on  entering  the 
country,  should  be  free  of  all  further  taxation 

The  Associated  Chambers  of  Commerce  will 
notice  that  the  present  duties  amount  to  7^  per 
cent  (5  per  cent  customs  and  2J  per  cent  tran- 
sit), but  that  even  after  this  7i  per  cent  the  mer- 
chandise is  liable  to  be  illegally  taxed.  It  would 
appear,  therefore,  that  even  an  increase  of  the 
present  duties  to  15  per  cent,  would  in  the  long 
run  pay  the  foreign  trader,  provided  that  this  15 



per  cent,  was  a  full,  final,  and  inclusive  charge, 
and  no  other  taxation  of  any  kind  was  im- 
posed. It  would  also  pay  the  Chinese  Govern- 
ment, as  even  if  they  returned  a  percentage  of 
this  increase  to  the  Provincial  authorities,  in 
order  to  reimburse  them  for  their  loss  of  likin, 
etc.,  they  would  still  have  a  considerable  surplus 
over  the  present  receipts.  More  than  this,  both 
the  Imperial  and  Provincial  revenue  would  soon 
feel  the  effect  of  increased  trade  which  greater 
privileges  and  a  certain  fixed  duty  would  un- 
doubtedly produce. 

The  foreign  merchants  without  exception  agree 
that  tarifif  revision  which  grants  China  any  in- 
crease of  revenue  must  include  the  following  as  a 
quid  pro  quo : 

1.  Extended  rights  of  residence  and  trade 
to  foreigners. 

2.  Removal  of  all  restrictions  on  navigation 
on  inland  waters,  and  opening  up  of  internal 
communication  by  railways. 

3.  Guarantees  for  the  immunity  of  foreign 
merchandise  from  further  taxation,  after  it  has 
paid  the  duties  fixed  by  treaty. 

They  also  considered  that  other  necessary  re- 
forms, not  directly  connected  with  the  question  of 
tariffs,  should  be  undertaken.  These  reforms  I 
have  fully  mentioned  in  my  "  Observations "  at 
the  end  of  this  Report,  and  I  would  submit  to 

the  Associated  Chambers  of  Commerce  that,  if 



treaty  revision  is  undertaken,  it  would  be  an  ex- 
cellent opportunity  to  bring  that  moral  pressure 
on  the  Chinese  Government  which  would  ensure 
all  of  these  reforms  being  carried  out.  The  Chi- 
nese authorities  must  have  money  to  carry  on 
administration,  and  the  commercial  classes  must 
have  some  return  for  the  concessions  they  will 
be  asked  to  make. 

One  important  point  in  tariff  revision  should 
not  be  overlooked  by  the  commercial  classes  of 
this  country.  Ad  valorem  duty  is  based  upon  a 
fixed  scale  of  values  in  certain  commodities.  The 
fall  in  prices  in  some  of  these  has  made  the  5  per 
cent,  ad  valorem  really  much  more  than  5  per 
cent.  In  some  cases  the  increase  has  been  so 
great  as  to  wipe  out  almost  any  margin  of  profit. 

On  the  Chinese  side  one  important  matter 
should  be  considered  when  treaty  revision  takes 
place.  The  Chinese  authorities  complain  that 
some  merchants  have  been  known  to  declare  the 
value  of  their  goods  at  much  below  the  real  sum. 
This  dishonesty  not  only  affects  customs  receipts, 
but  also  injuriously  affects  their  more  honest  trade 
rivals.  Some  method  should  be  devised  of  giving 
the  customs  authorities  a  check  upon  the  value  of 
the  cargoes. 

The  next  question  is,  How  is  treaty  revision  to 
be  carried  out  in  fairness  to  both  sides,  and  to  se- 
cure that  all  these  just  demands  of  the  merchants 
receive  proper  attention?  The  difficulty  about 
some  of  the  treaties  having  several  years  yet  to 



run  before  they  expire  will  not  be  dealt  with  easily. 
The  French  treaty  and  our  own  are  contermin- 
ous, but  the  Japanese  has  eight  years  and  the 
German  four  years  to  run.  I  submit  that  the 
proper  thing  for  China  to  do  would  be  to  try  and 
induce  these  countries  to  allow  their  treaties  to 
lapse,  and  join  Great  Britain  and  France  in  a  new 
general  commercial  treaty.  Failing  this,  the  only 
way  will  be  for  China  to  give  a  continuation  of  the 
British  and  French  treaties  till  the  date  the  oth- 
ers fall  in.  Unless  this  is  done,  Great  Britain  and 
France  will  be  binding  themselves  to  pay  specially 
high  rates  of  duty,  while  the  most-favored-nation 
clause  would  allow  other  Powers  to  share  in  the 
privileges  and  concessions  which  they  obtained 
from  China  in  return  for  such  duties. 

The  Marquis  I  to,  in  one  of  the  interviews  I  had 
with  him,  suggested  that  the  only  way  to  settle 
treaty  revision  in  a  satisfactory  and  speedy  manner 
was  to  have  a  conference  of  Ministers  in  China. 
He  pointed  out  that  to  refer  the  questions  involved 
to  the  various  home  Governments  would  involve 
needless  delay  and  confusion.  Those  on  the  spot, 
who  knew  the  subject  thoroughly,  should  be  in- 
trusted by  the  Governments  with  the  work  of  dis- 
cussing and  agreeing  upon  the  points  to  be  deter- 
mined, and  the  result  of  their  deliberations  could 
then  be  forwarded  in  the  form  of  a  draft  treaty  to 
their  respective  Governments.  It  appears  to  me 
that   this  suggestion  of  the  Marquis  Ito  is  one 

worthy  of  consideration. 



The  merchants  suggested  that,  in  order  to  arrive 
at  a  proper  understanding  and  to  assist  the  Minis- 
ters, there  should  first  of  all  be  a  committee  of 
consuls  sent  round  to  the  various  ports  to  obtain 
the  views  of  the  mercantile  communities  upon  cer- 
tain definite  c|uestions,  and  to  formulate  their  de- 
mands. Such  a  commission  should  consist,  they 
thought,  of  Chinese  officials,  British  consuls,  Euro- 
pean (not  British)  consuls,  and  a  British  merchant. 
Due  care  should  be  taken  that  the  interests  of  all 
nations  were  fairly  represented,  but  that  it  was  in 
proportion  to  their  trade. 

What  the  future  of  foreign  trade  in  China  might 
be  is  well  illustrated  by  a  comparison  between  the 
foreign  trade  of  that  country  and  Japan  at  the 
present  moment.  Japan  is  a  country  without  a 
tittle  of  the  natural  resources  of  China.  Japan  has 
only  a  population  of  42,000,000 ;  China  has  a  popu- 
lation of  over  400,000,000.  Japan's  foreign  trade 
last  year  was  $444,000,000 ;  China's  foreign  trade 
last  year  was  $495,000,000. 

In  conclusion,  I  cannot  avoid  noticing  here  the 
very  hearty,  sound,  business  ideas  of  British  mer- 
chants in  China  as  expressed  to  me  in  the  interviews 
I  had  with  them.  I  found  no  petty  feeling  of  com- 
mercial rivalry  animating  them.  On  the  contrary, 
they  were  most  anxious  to  impress  upon  me  how 
successful  their  methods  were,  and  how  little  they 
feared  the  competition  of  other  nationals,  if  a  fair 
field  was  assured  them.  There  is  more  danger  of 
their  undervaluing  the  effect  of  commercial  rivalry 
2D  417 


than  of  complaints  or  ill-feeling  because  of  such 

To  summarize  this  weighty  subject,  the  points 
are  as  follows: 

1.  There  are  many  fresh  openings  for  trade, 
to  which  the  attention  of  British  manufactur- 
ers should  be  directed.  The  commodities 
I  would  specially  note  are — glass,  tool-steel, 
steel  wire  rope,  electric  plant,  railway  material, 
mining  machinery,  high  explosives  for  mining 
purposes,  and  machinery  of  all  kinds. 

2.  Treaty  rights  must  be  enforced,  and 
illegal  impositions  on  trade  be  prevented. 

3.  In  return  for  tariff  revision  the  whole 
question  of  fiscal  and  other  reforms  ought  to 
be  raised  as  a  quid  pro  quo. 

4.  This  quid  pro  quo  must  include  all  and 
every  facility  for  trade  and  commerce  to  pene- 
trate into  the  interior. 

5.  Help  the  Chinese  to  reorganize  their 
forces,  to  police  the  country,  or  trade  cannot 
be  secure. 

The  situation  in  China  to-day  bristles  with  in- 
ternational, commercial,  and  financial  difficulties. 
British  commerce,  once  the  only  occupant  of  the 
field,  has  now  to  face  competition  and  adverse 
political  influences,  and  if  the  64  per  cent,  of  Brit- 
ish trade  is  to  be  maintained  and  increased,  our 
commercial  classes  will  have  to  use  all  their  ener- 
gies and  abilities  to  keep  the  flag  of  Great  Britain 

in  the  front  of  commercial  enterprise  in  China. 




As  I  received  several  invitations  from  Chambers 
of  Commerce  and  prominent  personages  interested 
in  Chinese  trade  to  visit  both  Japan  and  America, 
I  came  home  through  those  two  countries,  hoping 
that  I  might  be  able  to  gather  some  useful  in- 
formation for  the  Associated  Chambers  of  Com- 

On  arriving  at  Nagasaki,  January  ii,  1899,  I 
visited  the  large  mercantile  docks  and  works  of 
the  Mitsu  Bishi  Company. 

Perhaps  the  following  facts  may  be  interesting 
to  the  ship-building  community  of  this  country: 

There  are  two  yards,  a  short  distance  apart, 
both  under  the  direction  of  the  same  company. 
They  employ  4000  men.  I  found  on  the  stocks  a 
steamer  building  for  the  Japanese  mercantile  fleet 
—^000  tons,  430  feet  long,  and  45  feet  beam.  She 
had  a  double  bottom  right  fore  and  aft,  1 1  water- 
tight bulkheads,  without  doors,  twin^crews  to  run 
1 2  knots  with  7200  tons  dead-weight.  I  was  much 
struck  by  the  safety  and  capabilities  of  this  vessel. 

She  had  a  sister  ship  already  launched  and  cany- 



ing  freight.  I  was  told  that  both  of  these  ships 
will  be  built  at  a  loss,  owing  to  the  steel  they  use, 
which  comes  from  Scotland,  costing  ;^io  a  ton  on 
delivery.  This  loss  is  borne  by  Baron  Yonoski 
Iwasaki  and  Baron  Hisaya,two  rich  Japanese  gen- 
tlemen, in  support  of  the  patriotic  idea  of  starting 
shipbuilding  in  Japan.  With  the  exception  of  the 
loss  on  these  two  ships,  the  yards  are  doing  a  thriv- 
ing business.  I  saw  two  good  docks,  one  520  feet 
long,  and  the  other  360  feet  long.  I  also  found  an 
excellent  example  of  the  art  of  competition.  The 
Americans  are  trying  to  introduce  both  tool  steel 
and  pig-iron  at  such  a  low  price  as  must  entail  a 
loss.  All  the  tool  steel  and  pig-iron  at  present 
comes  from  Great  Britain,  as  does  all  the  coke  that 
is  used,  and  the  boiler  tubes  and  ingot  steel — the 
latter  from  Glasgow.  All  the  boilers  and  engines 
and  ordinary  shafting  are  made  at  the  works,  but 
very  heavy  shafting  comes  from  abroad. 

The  shops  were  in  first-rate  order,  well  found, 
well  built  and  cared  for. 

The  Japanese  are  making  strenuous  efiForts  to 
convey  all  their  water-borne  commerce  in  Japan- 
ese vessels.  From  what  I  saw  in  Japan  I  should 
be  inclined  to  think  that  the  trade  most  likely  to 
be  developed  with  Great  Britain  is  machinery.  A 
large  amount  of  machinery  in  Japan  is  of  British 
manufacture,  and  it  will  be  satisfactory  to  the 
Associated  Chambers  to  know  that  the  last  order 
for  twenty  engines  for  the  Government  railway 

has  been  given  to  Great  Britain. 



In  the  near  future  Nagasaki  is  certain  to  be  a 
point  of  departure,  being  such  a  good  harbor,  and 
right  in  the  route  between  America  and  China. 
The  energy  and  enterprise  of  the  Mitsu  Bishi 
Dock  Company  is  sure  to  find  its  reward. 

I  arrived  at  Kobe  on  the  13th  of  January.  I 
found  the  minds  of  the  British  merchants  here 
much  occupied  over  the  new  jurisdiction  which  is 
to  come  into  force  in  Japan  ist  of  July,  1899. 
After  receiving  several  addresses  I  was  asked  to 
give  an  opinion  on  this  matter.  In  answer,  I  re- 
marked that  it  would  be  well  to  see  how  this  new 
treaty  acted  before  criticising  it  adversely,  and  that 
it  would  further  the  interests  of  British  trade  if  the 
British  merchants  allowed  it  to  be  understood  that 
as  far  as  they  were  concerned  they  would  do  their 
best  to  help  the  Japanese  Government  to  carry 
out  the  tenor  of  the  treaty,  and  so  endeavor  to 
make  it  a  success. 

At  Osaka  I  visited  the  Military  Arsenal.  It  was 
principally  employed  making  a  new  quick-firing 
gun — i2-pounder — ^for  horse  and  field  artillery, 
Japanese  patent.  The  principle  was  certainly  sec- 
ond to  none.  They  were  also  making  a  magazine 
rifle,  Japanese  patent,  and  quite  perfect  in  design 
and  construction.  Most  of  the  machinery  in  this 
arsenal  is  British. 

I  visited  one  of  the  factories  of  the  Japan  Sugar 

Refining  Company.     This   enterprise   pays  well. 

The   sugar  comes  from  Java  and  is  refined  for 



use  in  Japan.  The  machinery  here  was  made  in 
Great  Britain. 

I  also  visited  the  largest  of  the  17  cotton  mills 
at  Osaka.  All  the  machinery  I  saw  was  British, 
and  I  was  told  this  was  the  case  throughout  all 
the  mills.  This  mill  employed  5000  men,  wom- 
en, and  children.  I  saw  some  weaving  milk  also. 
There  were  some  54,000  spindles  and  600  looms 
at  work.  In  Japan  there  are  70  cotton  mills 

There  are  30  match  factories  at  Osaka,  but 
most  of  them  are  on  a  very  small  scale.  I  visited 
one,  the  Osaka  Sei  Sui  Company.  A  great  part 
of  the  work  is  done  by  hand,  but  what  machinery 
they  have  is  German.  They  employ  1500  men, 
women,  and  children.  I  made  particular  inquiries 
as  to  whether  any  of  the  diseases  generated  by 
match-making  were  common  in  these  factories.  I 
was  informed  they  had  no  experience  of  such  dis- 
eases whatever. 

I  went  over  some  very  busy  iron  and  steel 
works,  which  belonged  to  an  Englishman  but  were 
registered  as  a  Japanese  Company.  The  works 
are  extensive  and  show  great  enterprising  energy. 
Twelve  hundred  men  are  employed.  I  saw  a  very 
good  small  dry-dock  and  three  steamers  on  the 
slips,  the  biggest  of  which  was  600  tons.  Several 
steam-pinnaces  were  building. 

I  have  called  attention  to  these  facts  in  the  Re- 
port, for  although   they  are  not  connected  with 

Anglo-Saxon  trade  proper,  they  are  industries  de- 



veloping  in  Japan,  and  increasing  the  volume  of 
Japanese  trade.  This  increase  in  volume  must 
create  a  demand  for  goods  of  Anglo-Saxon  manu- 

I  was  invited  to  attend  a  meeting  at  which  the 
Mayor,  the  General  Commanding,  the  Members 
of  the  Chambers  of  Commerce,  and  all  representa- 
tive citizens  were  present.  The  Mayor  spoke  of 
the  importance  of  the  Mission  sent  by  the  Asso- 
ciated Chambers  to  China,  and  declared  that  it 
was  imperative  for  the  future  of  Japanese  trade 
that  the  "Open  Door"  policy  be  adhered  to. 

On  the  15th  of  January,  at  Kioto,  I  went  over 
the'"great  electric  plant  worked  by  water-power, 
produced  with  a  fall  of  1 20  feet.  This  power  sup- 
plies Kioto  with  two-thirds  of  the  electric  light, 
works  the  electric  trams,  the  pumping  for  the  wa- 
ter-works, and  no  less  than  sixty  different  indus- 
tries in  or  near  the  town.  All  the  machinery, 
which  is  excellent,  is  American.  The  entire  plant 
cost  ;^50,ooo.  This  sum  was  found  by  the  mu- 
nicipal council,  who  are  solely  responsible  for  the 
scheme  and  its  successful  carrying  out  This 
system  of  electric  batteries  is,  I  think,  one  of  the 
most  remarkable  examples  of  municipal  progress, 
energy,  and  enterprise  to  be  seen  in  Japan,  or  per- 
haps in  any  country. 

Another  further  interesting  example  of  munic- 
ipal enterprise  is  illustrated  by  the  following : 

There  is  a  great  trade  and  passenger  traffic  from 
Kioto  to  Lake  Biwa,  and  through  the  lake  to  the 



surrounding  country.  Boats  used  to  come  up  the 
river  from  the  sea  to  Kioto  and  there  discharge 
their  passengers  or  cargo.  A  mile  had  then  to  be 
traversed  to  reach  the  lake,  where  passengers  and 
cargo  again  embarked  for  distribution.  This  in- 
terruption has  been  done  away  with  by  the  follow- 
ing ingenious  device.  On  arrival  at  Kioto  the 
boats  are  now  floated  into  a  cradle  and  hauled 
up  the  mile,  the  incline  of  which  is  120  feet,  by 
a  steel  wire  hawser  worked  by  an  electric  motor. 
By  this  means  the  same  boats  perform  the  whole 
distance  of  sixty  miles  from  the  sea  to  the  farther 
end  of  the  lake.  This  electric  tramway  for  boats 
is  most  extensively  used,  there  being  always  boats 
waiting  to  take  their  turn.  The  municipality  only 
charge  a  small  carriage  of  thirty  cents  on  each 
boat  hauled  up  the  incline.  The  invention  and 
the  whole  plant  is  American. 

There  is  no  country  which  I  have  visited  where 
electricity  as  a  motive  power  has  been  taken  ad- 
vantage of  to  the  same  extent  as  in  Japan,  for  the 
furtherance  and  development  of  trade  and  com- 
merce. Telephones  and  telegraphs  abound  in 
every  street  in  nearly  every  town  throughout  the 
empire,  and  a  very  large  and  increasing  number  of 
manufactures  are  worked  by  electric  power.  I 
made  many  inquiries  as  to  the  original  outlay  and 
working  expenses,  comparing  electricity  with  steam- 
power,  and,  taking  all  circumstances  into  consider- 
ation, the  former  is  unquestionably  the  cheaper. 

Before  leaving  Kioto  I  was  invited  to  a  meeting 



at  the  Mayoralty,  which  was  attended  by  all  the 
leading  Japanese  officials  and  merchants.  His  Ex- 
cellency the  Governor,  Wutsumi  Tadakatsu,  for- 
mally  welcomed  me,  as  representing  British  trade 
and  commerce,  to  Kioto.  He  spoke  of  the  future 
of  China,  and  maintained  that  it  was  necessary  for 
Japan  to  keep  the  Open  Door  for  her  trade  in  that 
country.  I  met  J.  Naiki,  the  Mayor  of  Kioto,  K. 
Hamaoka,  President  of  the  Chamber  of  Commerce, 
K.  Amenomori,  Chairman  of  the  City  Assembly, 
and  many  others.  All  these  gentlemen  were  very 
earnest  in  their  hopes  that  the  "Open  Door" 
policy  would  be  strongly  supported  and  guaran- 
teed by  those  countries  who  have  trade  in  China. 
They  made  frequent  allusions  to  the  friendly  feel- 
ing existing  between  Japan  and  Great  Britain. 

I  arrived  at  Tokio  on  the  morning  of  January 
17th.  That  evening  I  had  the  honor  of  meeting 
the  following  Japanese  gentlemen :  Marshal  Yama- 
gata, the  Minister-President;  Viscount  Aoki,  Min- 
ister for  Foreign  Affairs ;  Marquis  Saigo,  Minister 
for  the  Interior;  General  Viscount  Katsura,  Min- 
ister for  War;  Admiral  Yamamoto,  Minister  for 
Marine;  Viscount  Tanaka,  Minister  of  the  Im- 
perial Household;  Baron  Sannomiya,  Grand  Mas- 
ter of  the  Ceremonies ;  Baron  Kawaguchi,  Vice- 
Minister  of  the  Household ;  and  Count  Hirosawa, 
Private  Secretary  to  the  Minister-President.  All 
these  ^gentlemen  were  intensely  interested  in  the 
trading  and  commercial  future  of  China.  They 
were  quite  open  in  their  opinion  as  to  the  neces- 



*  * 

sity  for  the  great  trading  nations  to  combine  to- 
gether with  the  object  of  keeping  the  door  open  in 
China.  Their  expressions  were  most  friendly  to 
Great  Britain,  and  the  remark  was  frequently  made: 
"  England  and  Japan  must  work  together  in  the 
East  in  order  to  secure  the  future  development  of 
their  trade  and  commerce." 

I  elicited  the  opinion  that  the  "  Sphere  of  In- 
fluence" policy  in  China  would  be  considered  fatal 
to  the  trading  interest  of  Japan.     On  asking  why, 
it  was  pointed  out  to  me  that  Japan  had  a  large 
and  increasing  trade  with  Corea  and  Newchwang, 
and  hoped  shortly  to  develop  a  large  trade  at  F'oo- 
chow  and  Hankow;  that  if  the  Open  Door  prin- 
ciple prevailed  Japan  intended  to  push  her  mercan- 
tile enterprises  in  other  parts  of  China.    Opinions 
were  often  given  that  the  integrity  of  China  must 
be  preserved  if  the  principle  of  the  "  Open  Door  " 
was  to  obtain.     I  was  further  informed  that  the 
question   of  the   reorganization   of  the   Chinese 
Army  was  occupying  the  attention  of  those   in 
authority  in  Japan,  and  with  the  object  of  help- 
ing China  forward  in  this  direction  the  Japanese 
Government  had  consented  to  receive  thirty  Chi- 
nese students  into  the  military  college  at  Tokio. 
Besides  these  students,  while  I  was  at  Tokio,  fifty- 
seven  Chinese  recruits  arrived  from  China  to  be 
trained  as  non-commissioned  officers.     I  asked  the 
opinions  of  those  officers  who  had  been  in  com- 
mand in  China  during  the  late  Chino-Japanese 

War  as  to  the  soldier-like  qualities  of  the  Chinese. 



Opinion  was  unanimous  that  they  would  make 
splendid  soldiers  if  properly  trained,  properly 
treated,  and  properly  led.  Throughout  my  journey 
in  Japan  I  heard  the  most  friendly  expressions 
towards  the  Chinese, 

I  was  given  to  understand  that  the  Mission  sent 
to  China  by  the  Associated  Chambers  of  Com- 
merce was  regarded  with  the  keenest  interest  in 
Japan.  The  Japanese  hoped  that  it  would  result 
in  a  closer  relationship  between  the  two  nations, 
as  the  interests  of  each  were  identical. 

On  several  other  occasions  I  had  opportunities 
of  meeting  high  authorities,  and  the  leading  mer- 
chants of  Japan.  The  expressions  of  opinion  were 
always  similar  to  those  above  narrated. 

I  again  had  the  pleasure  of  paying  several  visits 
to  the  late  Prime-Minister,  Marquis  Ito. 

During  my  stay  at  Tokio  the  authorities  took 
me  over  the  various  schools  for  military  training — 
the  District  School,  the  Central  School,  and  the 
Military  School,  where  I  saw  all  the  classes  at 
work,  both  in  the  lecture-hall  and  in  the  gymna- 
sium and  riding-school.  Nothing  could  be  more 
perfect  than  the  system  of  teaching  and  training. 

I  also  went  over  the  arsenal  and  made  myself 
acquainted  with  the  pay,  hours,  and  system  of  the 
establishment.  There  are  6000  men  employed. 
No  country  turns  out  better  work.  The  greater 
part  of  the  machinery  and  tools  are  British,  the 
remainder  being  German  and  American. 

While  at  Tokio  the  Minister  for  War,  General 



Viscount  Katsura,  kindly  ordered  a  parade  of 
troops.  Artillery,  cavalry,  and  infantry  were  each 
quite  excellent  in  organization,  appearance,  and 
discipline.  The  cavalry  and  artillery  are  mounted 
on  a  very  good  class  of  horse,  bred  in  the  country 
from  Arab  and  American  stallions.  I  also  saw 
recruits  in  every  stage  of  learning  their  drill. 

The  remarkable  increase  of  the  physical  de- 
velopment of  the  men  who  serve  in  the  army  is 
well  worthy  of  notice.  It  was  so  apparent  that  I 
questioned  the  officers  as  to  the  reason.  They 
said  that  the  fact  was  perceived  with  the  greatest 
satisfaction  throughout  the  whole  Empire,  and 
that  it  was  accounted  for  by  the  physical  exer- 
cises the  men  had  to  perform  in  their  training, 
as  well  as  the  change  of  diet  which  had  been  inau- 
gurated. Part  of  the  men*s  rations  now  is  bread 
(made  with  American  flour)  and  meat,  the  same 
as  that  supplied  to  the  troops  of  European  coun- 
tries.    I  tasted  a  ration  and  found  it  excellent. 

The  barracks  which  I  saw  are  as  smart  and 
clean  as  is  possible.  I  visited  the  stores  of  cloth- 
ing, etc.,  for  the  reserve ;  each  regiment  is  respon- 
sible for  its  own  reserve  clothing  necessary  for 
mobilization.  The  esprit  de  corps  of  the  Japanese 
Army  is  very  apparent.  The  Government  allows 
a  certain  sum  to  each  regiment  for  the  clothing 
for  the  reserves.  The  colonels  and  officers  by 
economies  and  even  subscriptions  increase  the 
amount  of  clothing  until  the  stores  are  really  in 

excess  of  that  laid  down,  which  adds  considerably 



to  the  comfort  of  the  men  if  suddenly  called 

The  Chamber  of  Commerce  at  Tokio  invited  me 
to  address  a  public  meeting  on  the  future  develop- 
ment of  trade  with  China.  I  did  not  think  it 
would  be  courteous  to  refuse.  The  meeting  was 
attended  by  Ministers,  military  and  naval  officers 
of  distinction,  the  President  and  many  members  of 
both  Houses,  and  all  the  leading  gentlemen  of  the 
mercantile  community.  My  remarks  were  trans- 
lated for  the  benefit  of  those  who  did  not  under- 
stand English.  I  was  informed  that  the  views  I 
expressed  were  in  hearty  sympathy  with  the  audi- 
ence, who  thought  they  tended  towards  the  devel- 
opment of  trade  with  China,  and  also  provided  a 
peaceful  solution  of  the  problem  in  the  Far  East. 
It  was  conveyed  to  me  that  if  Great  Britain  would 
only  lead  with  a  definite  policy  in  China,  Japan 
would  most  certainly  follow. 

Several  Japanese  merchants  came  to  see  me, 
and  asked  me  to  convey  to  the  Associated  Cham- 
bers of  Commerce  a  matter  which  they  declare 
hinders  Japanese  trade  with  Great  Britain.  They 
said  that  the  merchants  of  Tokio  had  always  to 
pay  in  advance  for  goods  forwarded  direct  to 
Tokio,  which  was  not  the  case  with  goods  ordered 
for  Yokohama. 

I  visited  the  new  prison  of  Tokio,  with  the  ob- 
ject of  ascertaining  whether  any  industrial  works 
were  carried  on  in  the  establishment.     I  found  all 

prisoners  were  employed  in  working  for  private 



firms,  who  employed  them   by  contract;   nearly 
every  industry  was  represented. 

Before  leaving  Tokio  I  had  an  opportunity  of 
paying  my  respects  to  his  Majesty  the  Emperor. 
His  Majesty  was  much  interested  in  the  objects  of 
the  Commercial  Mission  to  China.  His  Majesty 
said :  "  I  am  very  pleased  you  have  visited  my 
country.  The  development  of  trade  with  China 
must  promote  a  stronger  feeling  of  friendship  be- 
tween the  peoples  of  Great  Britain  and  Japan,  the 
interests  of  both  countries  being  the  same.  I  am 
in  hopes  that  the  Mission  you  have  undertaken 
may  be  the  commencement  of  great  trading  enter- 
prise in  the  East,  in  whjch  my  country  must  take 
a  prominent  part.  Such  enterprise  will  not  only 
affect  the  East,  but  Europe  as  well,  though  Japan 
and  Great  Britain  will  be  the  countries  that  will 
principally  benefit." 

I  arrived  at  Yokohama  on  the  24th  of  January, 
and  was  invited  by  the  Minister  for  Marine,  Ad- 
miral Yamamoto,  to  visit  the  dockyard  and  fleet 
at  Yokoska.  The  Admiral  placed  H.I.M.  cruiser 
TakasagOy  built  at  Elswick,  at  my  disposal  to  take 
me  from  Yokokama  to  Yokoska.  I  went  all  over 
the  ship,  engine-rooms,  boiler-rooms,  etc.  She 
was  in  as  good  condition  as  a  man-of-war  could  be, 
and  her  ship's  company  were  smart,  well  dressed, 
and  well  disciplined.  There  is  a  large  torpedo 
depot  at  this  place,  where  everything  connected 
with  torpedo  warfare  is  kept  under  its  own  admin- 
istration for  care  and  maintenance— boats,  mines, 



cables,  batteries,  torpedoes  of  all  sorts,  and  all 
stores  connected  with  torpedo  warfare  belong  to 
this  depot.  This  is  an  infinitely  preferable  plan 
to  the  British,  where  everything  connected  with 
torpedo  warfare  is  only  an  auxiliary  of  the  great 
dockyards.  I  saw  here  three  of  the  Chinese 
ships  captured  by  the  Japanese  in  the  late  war, 
among  them  being  the  Chen  Yuen.  They  were 
all  being  refitted  for  service  in  the  fleet.  I  went 
all  over  the  naval  barracks,  which  were  in  the 
same  complete  state  of  efficiency  that  I  found  all 
naval  and  military  establishments  in  Japan.  I 
observed  the  same  system  carried  out  with  the 
seamen's  rations  as  is  carried  out  with  the  mili- 
tary rations.  The  officers  in  command  informed 
me  that  before  the  rations  were  altered  to  those  in 
vogue  in  Europe — ue.y  meat  and  bread  substituted 
for  or  added  to  native  diet  —  the  terrible  dis- 
ease of  beri-beri  was  not  at  all  uncommon  in  the 
Japanese  Navy.  Since  the  alteration  of  this  ration 
the  disease  has  entirely  disappeared. 

My  visit  to  Japan  impressed  me  that  the  politi- 
cal as  well  as  the  commercial  classes  are  deter- 
mined to  maintain  an  "  Open  Door  "  in  China,  in 
those  places  where  they  have  at  present  large 
commercial  interests.  .  The  nation  is  arming  slow- 
ly, but  most  effectively.  There  is  a  patriotism 
among  all  classes  that  is  most  discernible.  The 
future  well-being  of  Japan  depends  much  more 
largely  on  the  maintenance  of  the  "Open  Door" 
in  China  than  is  generally  known  in  this  country. 



The  population  of  Japan  is  increasing  rapidly. 
Only  one-twelfth  of  the  whole  Empire  can  be 
cultivated.  Food  will  have  to  be  imported.  In  a 
bad  rice  year  now,  food  is  imported  in  enormous 
quantities.  In  order  to  pay  for  this  import  Japan 
must  have  an  export.  China  is  the  nearest  market, 
and  Japan  requires  that  her  export  shall  not  be 
hampered  by  adverse  tarififs  on  arrival  in  China. 
I  have  entered  rather  fully  in  this  Report  into  the 
question  of  the  organization  and  efficiency  of  the 
naval  and  military  forces  of  Japan ;  because  these 
forces  will  have  to  be  reckoned  with  when  solving 
the  problems  connected  with  the  future  develop- 
ment of  trade  and  commerce  in  the  Far  East,  and 
their  efficiency  must  be  almost  as  great  a  point  of 
interest  to  Great  Britain  as  it  is  to  Japan. 



I  ARRIVED  at  San  Francisco  on  February  loth. 
I  visited  the  great  ship-building  yard  of  the  Union 
Steel  and  Iron  Works.  This  yard  turned  out  the 
famous  battle-ship  Oregon  and  the  cruiser  Column 
bia.  The  battle-ship  Wisconsin  had  been  recently 
launched  here,  and  was  being  completed.  This 
yard  has  the  reputation  of  continually  turning  out 
men-of-war  vessels  at  from  one  to  two  knots  over 
the  contract  speed.  While  I  was  there  the  Jap- 
anese cruiser  Chilose^  built  at  the  Union  Works, 
undertook  her  contract  steam-trial,  the  result  being 
nearly  two  knots  over  her  contract  speed.  I  visit- 
ed this  vessel,  and  found  her  excellent  in  all  de- 
tails. Her  armament  was  to  be  supplied  by  Els- 
wick.  This  yard  has  patented  a  pair  of  electric 
engines  for  revolving  the  turrets  of  the  heavy  guns 
mounted  on  the  Wisconsin.  It  is  a  cheap,  light, 
and  most  efficient  method.  By  invitation  of  the 
Commodore,  I  visited  the  Naval  Yard  at  Mare 
Island,  and  saw  some  of  the  auxiliary  ships  sent 
out  with  the  Iowa  and  Oregon.  These  consisted 
of  five  colliers,  properly  fitted  for  coaling,  a  dis- 

2E  433 


tiUing-ship,  and  a  refrigerating-ship  for  fresh  pro- 
visions. The  provision  -  ship,  the  Celtic^  bought 
from  an  English  firm,  can  carry  in  her  refrigerators 
fresh  meat  and  vegetable  rations  for  io,o<x>  men 
for  four  months.  I  visited  her  and  saw  all  her 
fittings.  The  two  battle-ships  were  entirely  self- 
supporting  during  their  long  cruise  from  the  At- 
lantic to  the  Pacific,  owing  to  sailing  in  company 
with  these  auxiliaries.  I  mention  this  in  the 
Report,  as  it  is  the  first  practical  illustration  of 
what  can  be  done  to  enable  a  fleet  to  keep  at  sea, 
ready  for  action,  and  supplied  with  all  necessaries 
— a  matter  very  important  for  the  protection  of 
trade  and  commerce  to  a  country  with  such  vast 
maritime  interests  as  Great  Britain. 

The  San  Francisco  Chamber  of  Commerce 
asked  me  to  address  them  on  matters  connected 
with  the  future  development  of  trade  in  China. 
I  accepted  their  invitation.  Afterwards,  many 
members  of  the  Chamber  informed  me  that  they 
entirely  concurred  with  the  view  that  the  "  Open 
Door  "  was  the  only  satisfactory  solution  of  the 
problem  of  how  to  develop  trade  in  China.  They 
also  said  that  they  hoped  the  present  friendly  feel- 
ing between  the  United  States  and  Great  Britain 
would  always  continue,  maintaining  that  if  the 
two  countries  worked  together  it  would  not  only 
benefit  the  trade  and  commerce  of  the  world  but 
also  make  for  peace.  All  the  mercantile  com- 
munity were  intensely  interested  in  the  Eastern 
Question,  pointing  out  that  San  Francisco  would 



naturally  be  the  port  for  the  great  output  of 
American  trade  when  China  was  opened  up. 

I  arrived  at  Chicago  on  February  1 7th,  where, 
as  the  representative  of  the  British  Associated 
Chambers,  I  enjoyed  the  hospitality  of  Mr.  McCor- 
mick,  the  President,  and  the  Committee  of  the 
Commercial  Club.  These  gentlemen  invited  me 
to  visit  the  Board  of  Trade  (the  Produce  and 
Stock  Exchange  of  Chicago).  On  being  intro- 
duced as  the  representative  of  the  British  Associ- 
ated Chambers,  the  whole  business  of  the  great 
market  ceased  for  the  moment,  an  event,  I  was 
informed,  absolutely  without  precedent,  which 
showed  the  keen  interest  taken  in  the  Commercial 
Mission  of  Inquiry  which  had  been  sent  to  China. 

Every  possible  kindness  was  shown  me,  and  I 
was  enabled  to  visit  the  Great  Bank  (Illinois 
Trust),  the  operating  room  of  the  Postal  Tele- 
graph and  Cable  Company — one  of  the  largest 
in  the  world — the  printing  works  of  one  of  the 
great  newspapers,  and  other  establishments  of 
great  interest. 

I  was  entertained  (February  i8th)  by  the  Com- 
mercial Club,  where  I  met  the  President  of  the 
Club  and  also  the  representative  merchants  of  this 
great  city.  The  regular  date  of  this  entertain- 
ment was  altered  to  suit  my  convenience,  an  un- 
usual compliment  only  once  before  paid  to  an  in- 
dividual— viz.,  General  Grant — a  further  proof  of 
the  interest  taken  in  the  Mission  to  China. 

The   speeches   delivered,  after  the  remarks  I 



ventured  to  make,  seemed  to  indicate  that  the 
mercantile  community  of  Chicago  were  intensely 
interested  in  the  Chinese  problem,  and  that  they 
regarded  the  question  of  equal  opportunity  for  the 
trade  of  all  nations  in  China  as  being  quite  as 
necessary  for  the  development  of  the  American 
trade  as  it  was  for  British  trade. 

I  arrived  at  Buffalo  on  February  20th.     I  was 
invited  by  the  Merchants'  Exchange  and  the  In- 
dependent Club  to  address  a  meeting  on  the  com- 
mercial future  of  China,  The  sentiments  generally 
expressed  after  my  remarks  were  to  the  effect  that 
the  "  Open  Door "  was  essential  for  the  further 
development  of  American  trade  with  China.  Some 
gentlemen  interested  in  the  great  electric  plant 
at  Niagara  kindly  took  me  all  over  the  colossal 
works.     There  is  no  reason  why  Buffalo  and  its 
vicinity  should  not  become  the  greatest  manufact- 
uring city  in  the  world.     I  observed  that  already 
the  ground  between  Buffalo  and  Niagara  was  well 
occupied  with  manufactories  built  and  building. 
I  was  informed  that  motive  power — electricity — 
is  supplied  from  Niagara   to  those  who   rent  it 
3-^  $5  {£^)  per  horse-power  per   month.     Every 
one  connected  with  this  electric  plant  feels  as- 
sured that  a  splendid  future  awaits  their  enter- 

I  visited  Washington  and  paid  my  respects  to 
the  President  of  the  United  States,  and  was  most 
hospitably  entertained  by  Mr.  Hay,  the  Secretary 
of  State  and  late  American  Ambassador  to  Great 



Britain,  where  I  met  many  distinguished  Amer- 
icans, senators  and  others. 

The  British  Commercial  Mission  to  China  was 
regarded  with  considerable  interest  by  all  whom  I 

I  arrived  at  New  York  on  February  23d.  That 
night  I  was  entertained  by  the  American  Asiatic 
Association,  and  I  was  asked  to  deliver  an  address. 
The  American  Asiatic  Association  was  formed  on 
the  same  lines,  and  with  the  same  objects,  as  the 
British  China  Association,  and,  like  the  China 
Association,  its  objects  are  political.  It  watches 
over  the  American  commercial  interests  in  the 
Far  East,  and  brings  political  pressure  to  bear  in 
furtherance  of  those  interests.  A  notable  feature 
of  this  entertainment  was  an  eloquent  speech  de- 
livered by  Mr.  Whitelaw  Reid,  the  great  apostle 
of  Protection  in  the  United  States,  declaring  that 
the  "  Open  Door  "  policy  was  the  best  for  Amer- 
ican trade  in  the  Philippine  Islands  and  in  China 
and,  more,  that  the  American  Government  intend- 
ed to  commit  itself  to  this  policy  in  the  Philippine 

The  following  day  I  was  asked  to  address  the 
Chamber  of  Commerce  of  New  York.  This  meet- 
ing was  quite  as  crowded  and  enthusiastic  as  the 
other  meetings  which  I  had  been  requested  to  ad- 
dress in  the  United  States.  At  all  these  meetings 
I  spoke  on  matters  solely  connected  with  trade  as 
it  at  present  exists  in  China,  and  on  questions  con- 
nected with  its  future  development  and  security. 



There  can  be  no  doubt  that  the  subject  excited 
a  considerable  amount  of  interest  throughout  the 
United  States.  This  was  shown  not  only  by  the 
manner  in  which  the  Press  of  the  country  dis- 
cussed the  matter,  but  also  by  the  numerous  let- 
ters I  received  from  trading  and  commercial  com- 
munities from  all  parts  of  the  United  States,  and 
by  the  many  telegrams  inviting  me  to  address 
public  meetings  throughout  the  country.  Among 
these  latter  were  several  from  the  largest  and  most 
important  cities  of  the  United  States,  such  as  Phil- 
adelphia, Boston,  Milwaukee,  Louisville,  Kansas 
City,  Cincinnati,  Baltimore,  and  many  more,  be- 
sides those  I  had  the  pleasure  of  visiting. 

I  visited  the  Naval  Yard,  where  I  was  received 
with  the  greatest  kindness  and  cordiality  by  the 
authorities.  I  went  on  board  the  Massachusetts^  a 
most  serviceable  and  heavily  armed  battle-ship. 

I  visited  also  the  great  steel  cable  factory,  and 
observed  the  most  interesting  method  of  effectu- 
ally lubricating  the  shaft ;  the  shaft,  with  the  six 
reels  containing  steel -wire  strands,  weighs  250 
tons.  It  revolves  at  the  rate  of  106  revolutions 
a  minute,  on  a  bearing  9  inches  in  diameter.  It 
is  kept  lubricated  by  means  of  an  automatic  hy- 
draulic pump,  of  great  power,  charged  with  oil. 
I  was  informed  that  a  hot  bearing  is  unknown, 
although  the  shaft,  with  all  its  weight,  rests  verti- 
cally on  so  small  a  surface. 

I  travelled  home  through  the  United  States, 
hoping  to  be  able  to  obtain  from  the  Chambers 



of  Commerce  some  definite  opinions  for  the  As- 
sociated Chambers  of  Great  Britain.  The  interest 
in  the  Mission  was  intense,  and  I  personally  was 
received  with  the  most  unbounded  hospitality, 
kindness,  and  cordiality.  I  was  asked  to  give  my 
views  on  China,  and  what  opportunities  existed 
for  the  development  of  trade  (particularly  Amer- 
ican trade)  in  the  East. 

Since  my  return  home  I  have  continued  to 
receive  many  letters  of  a  similar  tenor,  three  of 
which  I  here  append  to  show  the  interest  taken  by 
the  commercial  communities  in  the  United  States 
in  the  Mission  in  which  I  was  engaged. 

"  Massachusetts  State  Board  of  Trade, 
"  Lowell,  Mass.,  March  21,  1899. 

"  Rear-Admiral  Lord  Charles  Beresford,  R.  N., 

"  representing  the 
"  Association  of  Chambers  of  Commerce 
"  of  the  United  Kingdom, 

**  London,  England. 
"  Dear  Sir, — The  Members  of  the  Massachusetts 
State  Board  of  Trade,  composed  of  forty-two  mer- 
cantile organizations  representing  the  commercial 
and  industrial  interests  of  the  State,  beg  to  ac- 
knowledge receipt  of  your  favor  of  the  21st  ultimo, 
and  also  express  their  regrets  that  your  limited 
time  in  this  country  would  not  permit  an  accept- 
ance of  the  invitation  to  visit  our  Commonwealth. 
"  The  Mission  in  which  you  have  been  recently 
engaged,  under  the   auspices   of  the  Associated 



Chambers  of  Commerce,  to  ascertain  the  best 
methods  for  promoting  trade  and  commerce  in 
China,  is  one  of  more  thdh  ordinary  importance  to 
the  American  people,  and  the  results  of  your  inves- 
tigation, as  embodied  in  a  report,  will  be  read  with 
great  interest  throughout  the  commercial  and  in- 
dustrial world. 

"  The  Massachusetts  State  Board  of  Trade  is  in 
hearty  sympathy  with  any  plan  that  will  provide 
equitable  national  competition  for  the  import  and 
export  trade  of  the  great  Chinese  Empire,  and 
believes  that  the  earnest  support  and  forceful  in- 
fluence of  commercial  bodies  among  the  nations 
interested  should  be  freely  given  in  promoting  and 
advancing  national  legislation  in  this  direction. 

"  Please  convey  to  the  Members  of  the  Asso- 
ciated Chambers  of  Commerce  of  the  United  King- 
dom the  most  cordial  greetings  of  the  Massachu- 
setts State  Board  of  Trade,  who  deeply  appreciate 
their  earnest  efforts  to  develop  trade  and  commerce 
and  advance  the  standard  of  civilization  in  the  Far 

"  With  the  hope  that  a  practical  and  beneficial 
commercial  alliance  may  be  the  ultimate  result  of 
your  endeavors, 

"  We  have  the  honor  to  remain, 
"  Very  truly  yours, 

"  Charles  E.  Adams, 

"  Presidents 


"The  Philadelphia  Commercial  Museum, 
"  233  South  Fourth  Street, 

"  Philadelphia,  March  21,  1899. 

"  Lord  Charles  Beresford, 
"  The  Admiralty, 

"  London  England. 

"  My  dear  Lord  Charles, — I  have  your  very 
kind  favor  of  March  3d,  written  on  board  the  SL 
Louis^  and  appreciate  very  much  your  thought- 

"  It  was  a  great  disappointment  to  me,  and  to 
Philadelphians  generally,  that  you  were  not  able  to 
visit  our  city.  I  was  especially  sorry  not  to  have 
had  the  opportunity  of  showing  you  in  detail  the 
workings  of  the  Philadelphia  Commercial  Museum, 
especially  in  view  of  the  efiforts  we  are  at  present 
making  to  acquaint  our  people  with  the  opportuni- 
ties existing  in  the  Far  East — opportunities  which 
you  have  so  eloquently  set  forth  as  presenting 

"  I  trust  when  the  result  of  your  observations  in 
the  Orient  is  laid  before  the  Associated  Chambers 
of  Commerce  in  England,  this  Institution  may  be 
favored  with  a  copy. 

"  Hoping  that  some  time  in  the  future  you  may 

find  it  possible  to  visit  Philadelphia,  and  that  I 

may  then  be  fortunate  enough  to  explain  to  you 

the  efforts  being  made  by  our  Institution  to  foster 

export  trade,  and  trusting  that  our  two  countries 



may  always  co-operate  in  the  industrial  and  com- 
mercial development  of  the  Far  East,  believe  me, 

"  Most  sincerely  yours, 

"  W.  P.  Wilson, 

"  Director:' 

^"^  February  24,  1899. 
"  Right  Hon.  Lord  Charles  Beresford,  M,P., 
"  London,  England : 

"Sir, — I  am  directed  by  the  President  to  ac- 
knowledge receipt  of  your  valued  favor  15th  inst 
It  is  a  matter  of  great  regret  to  us  that  your  time 
was  so  limited  in  this  country  that  you  could  not 
give  us  the  pleasure  of  entertaining  you. 

"  Your  Mission  is  one  of  very  great  importance 
to  this  country,  as  well  as  the  country  you  so  ably 
represent.  We  take  this  occasion  to  express  the 
thankfulness  (which  we  believe  is  the  feeling  of 
every  true  American)  for  the  very  cordial  relations 
existing  between  Great  Britain  and  the  United 
States.  So  long  as  cordial  relations  and  active 
co-operation  for  the  good  of  humanity  exist,  un- 
told benefits  must  come  to  the  world. 

"  It  will  give  us  very  great  pleasure  to  receive  a 
copy  of  your  Report. 

"  Yours  faithfully, 

'  "E.  D.  BiGELOW, 

"  Secretary^ 

The  principle  of  the  "Open  Door"  is  unani- 
mously held  to  be  the  policy  necessary  for  the  in- 



crease  of  the  United  States  trade  with  China ;  but 
there  the  matter  rests.  I  heard  no  sentiments  ex- 
pressed which  conveyed  to  me  any  opinion  on  the 
part  of  any  of  the  American  Chambers  of  Com- 
merce as  to  how  the  "  Open  Door  "  principle  was 
to  be  insured,  although  I  did  hear  many  opinions 
expressed  that  the  time  could  not  be  far  distant 
when  the  Chinese  Empire  would  be  added  to  the 
list  of  those  countries  which  had  fallen  to  pieces 
from  internal  decay.  Though  the  great  trading 
classes  of  the  United  States,  as  far  as  I  could 
gather,  are  keenly  alive  to  the  necessity  of  safe- 
guarding the  future  of  the  United  States'  commer- 
cial interests,  it  was  quite  apparent  to  me  that 
those  in  authority,  and  indeed  the  people  as  a 
whole,  are,  for  the  present,  at  any  rate,  going  to 
allow  Chinese  affairs  to  take  care  of  themselves. 
It  was  very  satisfactory  to  me  to  be  frequently  told 
that  the  fact  of  the  British  Associated  Chambers 
having  sent  a  Mission  of  Inquiry  to  China  would 
provoke  an  interest  among  the  commercial  classes 
of  the  United  States  with  regard  to  the  future  of 
China.  The  attitude  taken  up  by  the  commercial 
classes  in  Japan  was  totally  different  from  that 
which  I  found  in  the  United  States.  Both  saw 
the  necessity  of  keeping  the  Door  open  in  China 
if  full  advantage  was  to  be  taken  of  the  possible 
development  of  American  or  Japanese  trade ;  but 
while  on  the  Japanese  side  there  was  every  indi- 
cation of  a  desire  to  act  in  some  practical  manner 
in  order  to  secure  the  Open  Door,  I  could  discover 



no  desire  on  the  part  of  the  commercial  communi-  ^ 
ties  in  the  United  States  to  engage  in  any  practical 
efifort  for  preserving  what  to  them  might  become 
in  the  future  a  trade,  the  extent  of  which  no  mortal 
can  conjecture.  On  many  occasions  I  suggested 
that  some  sort  of  understanding  should  exist  be- 
tween Great  Britain  and  the  United  States  for  the 
mutual  benefit  of  the  two  countries  with  regard 
to  the  future  development  of  trade  in  China;  but 
while  receiving  the  most  cordial  support  to  this 
proposal,  nothing  of  a  definite  character  was  sug- 
gested to  me  that  I  could  present  to  the  Associ- 
ated Chambers. 

Looking  at  the  matter  fairly,  the  public  mind 
in  the  United  States  is  occupied  with  an  entirely 
novel  policy,  which,  being  an  actual  fact,  must  be 
more  engrossing  to  the  American  public  than 
matters  which  up  to  now  even  have  not  advanced 
into  the  region  of  discussion.  I  refer  to  the  policy 
of  expansion,  as  illustrated  by  the  difficult  problem 
which  has  to  be  solved  in  the  Philippine  Islands. 
Added  to  this,  the  actual  trade  between  the  United 
States  and  China  at  the  present  moment  is  a  very 
small  proportion  of  the  whole  foreign  trade  of  that 
country,  only  8  per  cent.  The  American  trade 
with  China  is,  however,  very  much  larger  than 
appears  in  the  import  list  contained  in  the  returns 
of  the  Imperial  Maritime  Customs  of  the  Chinese 
Empire.  Taking  the  question  of  the  import  of 
plain  cotton  goods  alone  for  the  years  1887-1897 
inclusive,  referred  to  in  this  Report  in  the  chapter 



on  "  Shanghai,"  it  will  be  seen  that  American  goods 
during  those  ten  years  have  increased  in  quantity 
1 2  I.I  I  per  cent,  and  5945  per  cent  in  value, 
while  the  British  import  of  the  same  class  of 
goods  has  decreased  13.77  P^*"  cent,  in  quantity, 
and  7.9  per  cent  in  value.  In  examining  these 
trade  returns  the  question  of  ownership  and  manu- 
facture is  an  all-important  one.  At  the  time  of 
import  this  cotton  is  owned  by  the  British  mer- 
chant and  shipped  in  British  bottoms,  but  the 
competition  of  the  United  States  is  directly  with 
the  Lancashire  cotton  manufacturer.  I  was  much 
impressed  by  the  good  feeling  and  friendship  tow- 
ards Great  Britain  expressed  by  all  with  whom  1 
came  in  contact  in  the  United  States.  These 
kindly  sentiments  were  particularly  marked  on  all 
occasions  when  the  health  of  her  Majesty  the 
Queen  was  proposed.  I  believe  that  a  great  deal 
of  the  enthusiasm  with  which  I  was  received  dur- 
ing my  journey  throughout  the  United  States  was 
actuated  by  the  sentiments  of  kindly  feeling  tow- 
ards the  British. 

There  is  a  very  large  and  increasing  export  trade 
of  flour  from  America  to  China.  The  Chinese 
are  appreciating  this  class  of  food  more  every 
year.  There  is  also  a  great  export  of  American 
machinery  of  all  sorts  to  China.  The  whole  of 
the  Russian  railway  plant  in  Manchuria  —  viz., 
rolling-stock,  rails,  and  sleepers — comes  from  the 
United  States.  There  is  also  a  large  import  of 
American  machinery  into  Japan. 



Although  the  American  percentage  of  trade 
with  China  is  only  8  per  cent,  of  the  whole,  it  is 
important  to  remember  in  what  a  comparatively 
short  time  this  has  been  built  up,  and  if  to  this 
percentage  was  added  the  proportion  of  British- 
owned  trade  in  commodities  of  American  origin, 
I  am  of  opinion  that  it  would  be  found  that 
the  actual  American  manufactured  goods  repre- 
sent a  very  much  larger  percentage  than  is  gen- 
erally known.  As  it  is,  American  trade  repre- 
sents 8  per  cent,  as  against  28  per  cent,  of  all 
other  nations  (excluding  Great  Britain)  combined. 

The  only  direction  in  which  I  found  a  falling 
off  in  American  trade  was  in  kerosene  -  oil,  in 
which  industry  Russia  and  Sumatra  are  becoming 
America's  chief  competitors.  A  noteworthy  fact 
that  was  brought  to  my  notice  by  the  Commis- 
sioner of  Customs  at  Newchwang  was,  that  Ameri- 
can manufactured  goods  at  that  port  now  repre- 
sent about  50  per  cent,  of  the  whole  foreign  im- 
port, showing  that,  at  any  rate  in  North  China, 
American  trade  is  increasing  in  volume  and  im- 

The  problems  connected  with  the  future  de- 
velopment of  trade  in  China  will  be  solved  more 
easily  if  the  powerful  Anglo-Saxon  races  can  come 
to  some  mutual  understanding  regarding  them. 
As  the  interests  of  the  United  States  and  Great 
Britain  are  absolutely  identical  in  China,  an  un- 
derstanding must  conduce  to  the  benefit  of  both 

great  nations,  and  certainly  make  for  the  peaceful 



solution  of  the  difficulties.  Both  nations  are  es- 
sentially trading  nations,  neither  want  territory, 
they  both  wish  to  increase  their  trade.  With  an 
equal  opportunity  throughout  China,  they  would 
not  only  increase  their  trade  but  do  much  towards 
increasing  the  prosperity  of  the  whole  world. 



In  reviewing  this  Report,  several  points  become 

1.  The  anxiety  of  British  merchants  in  China 
as  to  the  security  of  capital  already  invested. 

2.  The  immediate  necessity  for  some  assurance 
to  be  given  to  those  who  are  willing  to  invest 
further  capital. 

3.  That  this  existing  sense  of  insecurity  is  due 
to  the  effete  condition  of  the  Chinese  Government, 
its  corruption  and  poverty;  and  to  the  continual 
riots,  disturbances,  and  rebellions  throughout  the 

4.  That  the  rapidly  advancing  disintegration  of 
the  Chinese  Empire  is  also  due  to  the  pressure  of 
foreign  claims,  which  she  has  no  power  either  to 
resist  or  refuse — all  this  leading  to  the  total  inter- 
nal collapse  of  authority. 

5.  The  terrible  prospect  of  a  civil  revolution, 
extending  over  an  area  as  large  as  Europe,  among 
400  millions  of  people,  upon  which  catastrophe  the 
thin  line  of  European  civilization  on  the  coast,  and 

a  few  ships  of  war,  would  have  little  or  no  eflfect 



6.  The  uncertainty  as  to  what  Government 
would  follow,  should  the  present  dynasty  fall,  and 
our  ignorance  as  to  what  policy  any  future  admin- 
istration would  adopt  respecting  the  contracts  and 
concessions  made  by  the  existing  Tsung-li-Yamen. 

7.  The  fear  of  the  traders  of  all  nations  in 
China  that  the  home  Governments  of  Europe, 
in  their  desire  to  conciliate  the  interests  of  those 
who  seek  trade  with  those  who  want  territory, 
should  drift  into  the  Sphere  of  Influence  policy, 
thereby  endangering  the  expansion  of  trade,  incur- 
ring  the  risk  of  war,  and  hastening  the  partition 
and  downfall  of  the  Chinese  Empire. 

8.  The  apprehension  existing  in  all  capable 
minds  in  China  lest  the  Governments  of  Europe, 
after  beginning  with  the  bullying  expedient  of 
claims  and  counter-claims,  and  then  drifting  into 
the  policy  of  Spheres  of  Influence,  should  end  by 
hopelessly  blocking  the  Open  Door. 

9.  The  undoubted  loss  of  British  prestige 
throughout  the  whole  Chinese  Empire  owing  to 
recent  political  events  in  the  North. 

From  my  own  observation,  I  consider  these  fears 
and  anxieties,  put  before  me  by  the  traders  of  all 
nations,  and  the  Chinese,  well  worthy  of  the  imme- 
diate attention  of  the  Associated  Chambers  of 
Commerce.  Upon  the  foregoing  Points  I  beg 
to  offer  the  following  Observations : 

Upon  Point  2,  I  would  observe  that  the  more 
capital  is  invested  in  China,  the  greater  the  claims 

2F  449 


of  the  foreign  traders  upon  the  protection  of  their 
home  Governments. 

As  to  Point  3, 1  assert  that  the  great  bulk  of 
the  Chinese  people  are  honest,  acute  men  of  busi- 
ness ;  that  only  the  traditional  method  of  govern- 
ment is  corrupt;  the  honest  mandarin  has  no 
chance  under  the  system.  Disturbances  are  due 
to  the  want  of  proper  military  and  police. 

With  respect  to  Point  4,  I  feel  most  strongly 
that  the  pride  and  profession  of  Great  Britain,  to 
be  the  champion  and  chivalrous  protector  of  weak 
nations,  have  been  humbled  and  exposed  by  her 
acquiescing  and  taking  part  in  the  disintegrating 
policy  of  claims  and  counter-claims  with  which 
the  Chinese  Empire  is  being  bullied  while  she  is 
down.  I  hold  that  to  break  up  a  dismasted  craft, 
the  timbers  of  which  are  stout  and  strong,  is  the 
policy  of  the  wrecker  for  his  own  gain.  The  real 
seaman  tows  her  into  dock  and  refits  her  for  an- 
other cruise. 

With  regard  to  Point  5,  in  my  opinion  there 
is  only  one  remedy,  which  is  to  maintain  the  in- 
tegrity  of  the  Chinese  Empire,  and  give  security 
to  the  trade  of  all  nations,  by  a  thorough  reorgan- 
ization of  the  army  and  police  of  the  entire  coun- 
try. As  this  can  only  be  done  by  outside  help, 
and  as  those  who  are  able  to  render  the  service 
are  apparently  afraid  to  step  in,  either  from  want 
of  confidence  in  China's  recuperative  power,  or 
from  fear   of  their  neighbor's  opinion,  I  would, 

with   all  deference,  offer  the  following  sugges- 



tion:  Why  should  not  Great  Britain,  which  has  the 
largest  vested  interest  in  the  country,  lead  the  way, 
and  invite  the  co-operation  of  all  interested  par- 
ties, in  the  organization  of  China's  military  and 
police,  in  the  same  spirit  as  Sir  Robert  Hart  has 
organized  her  Customs?  If  it  is  objected  that 
some  one  nation  might  thereby  seek  or  gain  pre- 
dominance in  the  country,  and  thus  provoke  jeal- 
ousy among  the  rest,  why  should  not  this  objec- 
tion be  anticipated  by  a  clear  understanding  that 
those  who  co-operate  from  various  nations  to  do 
this  work  shall  be  strictly  the  servants  of  the  Chi- 
nese Empire,  like  General  Gordon  or  Sir  Robert 
Hart;  and  that  the  one  and  only  end  in  view  is 
to  strengthen,  support,  and  maintain  the  Govern- 
ment of  China,  and  the  lives  and  properties  of  the 
European  traders  ? 

If  it  be  objected  that  some  nations  might  refuse 
to  co-operate,  may  it  not  be  said  in  reply  that 
Great  Britain  has  met  a  similar  objection  before 
in  Egypt;  and  that  no  number  of  such  refusals 
can  absolve  the  four  great  trading  nations  from 
coming  to  the  rescue  of  the  Chinese  Government 
and  their  own  traders  in  a  moment  of  imminent 
peril  ? 

If  it  be  objected  that  China  itself  is  effete  and 
rotten,  I  reply  that  this  is  false.  The  traditional 
official  system  is  corrupt,  but  the  Chinese  people 
are  honest.  The  integrity  of  their  merchants  is 
known  to  every  banker  and  trader  in  the  East, 
and  their  word  is  as  good  as  their  bond    They 



have,  too,  a  traditional  and  idolatrous  respect  for 
authority,  and  all  they  need  is  an  honest  and  good  j 


If  it  be  objected  that  this  reform  of  the  Chinese 
forces  would  be  costly,  I  answer  that  the  neces- 
sary reorganization  could  be  effected  by  an  honest 
expenditure  of  the  moneys  now  allowed  for  de- 
fence, and  need  not  cost  a  shilling  of  European 
money.  I  have  proved  to  my  own  satisfaction 
that  effective  military  and  police  forces  could  be 
organized  on  the  funds  now  available  for  these 
purposes.  The  country  is  not  over-taxed,  it  is 
badly  taxed,  and  the  Revenue  is  peculated  whole- 
sale. What  the  Sphere  of  Influence  policy  would 
cost,  in  loss  through  hostile  tariffs  and  in  expen- 
diture of  blood  and  money  for  defence,  it  is  not 
possible  to  say.  For  who  can  estimate  the  diffi- 
culty and  cost  to  European  Powers  of  defending 
and  administering  huge  sections  of  a  country  with 
bad  roads,  teeming  with  a  population  absolutely 
hostile  to  foreigners  and  foreign  domination? 
The  Chinese  are  conservative.  They  have  behind 
them  the  traditions  of  4000  years,  and  within 
them  the  prejudices  natural  to  isolation. 

The  Spheres  of  Influence  policy  would  certainly 
weaken  all  central  authority  in  the  Chinese  Em- 
pire, and  would  transfer  the  responsibility  for  law 
and  order  to  a  disconnected  and  often  antagonistic 
group  of  foreign  settlers,  who  would  find  the  work 
of  peaceful  administration  wellnigh  impossible. 

Nominal  Spheres  of  Influence,  such  as  those  of 



Germany  in  Shantung  and  Russia  in  Manchuria, 
may  exist  as  long  as  a  semblance  of  Chinese  author- 
ity remains,  but  once  the  people  realize  authority 
is  powerless,  anarchy,  rebellion,  and  bloodshed  must 
ensue.  The  breaking-up  of  the  Chinese  Empire 
into  Spheres  of  Influence  would  also  be  certain  to 
lead  to  war  between  the  European  nations.  It  is 
surprising  that  people  can  be  found  to  talk  calmly 
of  the  break-up  of  an  empire  of  400  millions  of 
people,  as  if  such  a  gigantic  revolution  could  be 
accomplished  by  a  stroke  of  a  pen. 

I  may  be  told  that  we've  got  a  policy  made  out 
of  old  treaties  and  agreements  which  we  must  con- 
tinue. If  that  be  so,  I  reply  that  the  time  has  come 
when  these  treaties  and  agreements  should  receive 
a  thorough  revision,  because  arrangements  made 
with  safety  when  China  was  strong  may  turn  into 
grave  perils  now  China  is  weak.  The  effete  con- 
dition of  the  Chinese  Government  entirely  alters 
the  mutual  relations  of  her  foreign  neighbors.  It 
has  been  said  that  the  danger  connected  with  weak 
nations  comes  from  the  jealousies  of  the  neighbors 
who  are  waiting  to  divide  the  property  among  them. 
These  jealousies  may  for  a  moment  be  smoothed 
over  by  small  mutual  concessions  paid  on  account ; 
but  such  temporary  expedients  can  have  no  finality, 
and  will  only  serve  to  bring  about  the  fatal  policy 
of  Spheres  of  Influence,  creating  gigantically  ex- 
pensive European  military  frontiers  in  the  Far  East, 
with  no  strong  Chinese  buffer  between  them. 

With  respect  to  Point  8,  I  cannot  repeat  too 



often  the  profound  conviction  held  by  every  trader 
in  China  that  the  policy  of  the  Open  Door,  or 
equal  opportunity  for  the  trade  of  all  nations,  is 
the  one  and  only  policy  possible  for  the  develop- 
ment of  trade  and  commerce.  It  is,  however,  no 
use  theorizing  over  so  vital  a  question.  We  must 
declare  in  some  practical  manner  how  the  policy 
is  to  be  carried  out.  Neither  is  it  any  use  keeping 
the  door  open  without  insuring  that  the  room  on 
the  other  side  of  the  door  is  in  order.  To  keep 
the  door  open  the  integrity  of  the  Chinese  Empire 
must  be  maintained.  To  preserve  that  integrity, 
the  organization  of  her  military  forces  for  police 
purposes  is  necessary.  Whatever  fiscal  policies 
may  be  projected  by  the  stay-at-home  diplomatists 
of  European  States,  let  this  be  clearly  understood, 
that  the  traders  of  all  countries  in  Chinese  territory 
are  absolutely  unanimous  in  their  belief  in  the 
policy  of  the  Open  Door.  The  Chambers  of  Com- 
merce in  China  are  composed  of  all  nationalities, 
and  it  will  be  seen  that  the  resolutions  of  these 
Chambers  cordially  support  the  views  of  the  China 
Association,  which  is  purely  British.  Politicians 
and  traders  have  not  always  the  same  ends  in  view, 
nor  the  same  plans  for  getting  what  they  want 
The  politician  may  wish  only  for  an  apparent  ad- 
vantage, and  get  it  by  bluff,  but  in  doing  so  he  may 
seriously  endanger  the  peace  and  progress  nec- 
essary for  the  development  of  commerce.  Nations 
weak  in  trade  but  enterprising  in  diplomacy  may 
seek  territorial  aggrandizement,  and  by  their  action 



ruin  the  commerce  of  countries  strong  in  trade 
but  feeble  in  policy. 

Another  point  of  importance  is  the  probable  de- 
mand of  China  to  increase,  under  a  new  Treaty, 
the  tarifif  levied  on  foreign  goods.  If  this  be  ac- 
ceded to  some  quid  pro  quo  must  be  given  to  the 
European  Powers.  Again,  if  the  European  Powers, 
by  joint  action,  agree  to  maintain  the  integrity  of 
the  Chinese  Empire  on  the  lines  I  have  indicated, 
some  quid  pro  quo  must  be  given  by  China  in  re- 

The  European  nations  should  insist  on  a  series 
of  reforms  in  Chinese  administration  and  finance, 
which  are  as  necessary  to  China  herself  as  to  her 
foreign  traders.  These  reforms  may  be  epito- 
mized thus : 

1.  An  Imperial  coinage. 

2.  Reform  in  the  method  of  collecting  the  land 

3.  Removal  of  restrictions  on  the  export  of  grain. 

4.  Modification  of  the  laws  governing  the  salt 

5.  The  right  of  foreigners  to  reside  in  the  in- 
terior for  purposes  of  trade. 

6.  The  registration  and  protection  of  trade- 
marks and  copyright. 

7.  The  removal  of  the  remaining  restrictions  on 
inland  water  navigation. 

8.  The  abolition  of  the  likin,  or  reforms  which 
would  insure  that  likin  should  be  collected  once 



9.  Greater  facilities  to  be  given  to  bona  fide  for- 
eign syndicates  to  work  minerals. 

10.  The  establishment  of  bureaus  for  the  regula- 
tion of  finance,  railways,  waterways,  roads,  posts, 
and  telegraphs,  and  a  bureau  to  deal  with  all 
questions  connected  with  trade.  All  of  these  are 
urgently  needed,  particularly  for  the  postal  and 
telegraph  services,  which  are  at  present  managed 
under  a  legalized  system  of  squeeze.  The  foreign 
merchants  constantly  complain  that  the  existing 
service  is  so  untrustworthy  that  no  letters  between 
the  ports  are  safe  unless  registered.  The  present 
telegraph  service  is  so  bad  that  a  letter  from  Tien- 
tsin to  Shanghai  has  been  known  to  arrive  before  a 
telegram  sent  at  the  same  time.  The  Times  Cor- 
respondent at  Peking  told  me  that  his  telegrams 
very  often  cost  as  much  to  send  from  Peking  to 
Shanghai  as  from  Shanghai  to  London. 

11.  One  other  bureau  is  urgently  needed,  and 
that  is  a  Trade  Intelligence  Department,  to  deal 
with  scientific  and  practical  questions  relating  to 
the  natural  products  available  in  China  for  com- 
mercial purposes.  What  is  an  insignificant  export 
to-day  may  become  a  valuable  article  of  commerce 
to-morrow.  There  should  be  a  scientific  classifi- 
cation of  the  products  of  China  on  the  same  lines 
as  the  classification  of  products  in  India. 

I  would  also  like  to  point  out  to  the  Associated 

Chambers  the  desirability  of  impressing  upon  the 

British  centres  of  commercial  education  the  neces- 



sity  for  teaching  the  Chinese  language  to  British 
youths  who  are  to  seek  employment  in  that  coun- 
try. This  has  been  undertaken  already  by  Ger- 
man and  American  traders. 

The  question  for  the  future,  to  my  mind,  is  this : 
Are  the  great  trading  nations  of  the  world  going 
to  allow  the  Powers  that  seek  only  territorial  ag- 
grandizement to  blockade  the  wealth  of  China, 
and  shut  the  Open  Door  in  their  faces  ? 

With  regard  to  British  Commerce  in  China,  it 
is  true  that  we  have  lost  no  ground  so  far  as  exist- 
ing trade  is  concerned,  but  our  commercial  su- 
premacy is  seriously  threatened  by  competition. 
We  could  not  expect  to  enjoy  always  the  advan- 
tageous position  we  have  held  in  the  past.  We 
cannot  hope  to  have  everything,  but  with  equal 
opportunity  to  all  we  shall  do  well. 

If  it  be  said  that  my  policy  for  the  reorganiza- 
tion of  the  Chinese  army  and  police  is  a  warlike 
policy,  I  reply  that  it  is  the  only  plan  yet  suggest- 
ed which  gives  any  guarantee  of  peace.  Great 
Britain's  strongest  guarantee  of  peace  has  been 
the  reorganization  of  her  fleet.  Without  peace 
commerce  must  perish.  To  keep  the  peace,  au- 
thority must  be  properly  equipped.  Our  choice 
with  regard  to  the  Chinese  Empire  is  simple — we 
may  choose  to  wreck  or  we  may  choose  to  restore. 





,    \ 







Hon.  Sir  STAFFORD  NORTHCOTE,  Bart.,  M.P., 

President  of  the  Associated  Chambers  of  Commerce  of 

Great  Britain, 

''August  I,  1898. 

''Dear  Beresford, — You  know  the  deep  interest  which 
the  Associated  Chambers  of  Commerce  take  in  the  develop- 
ment of  British  trade  with  China. 

''As  President  of  the  Association,  I  feel  bound  to  do  all  in 
my  power  to  promote  our  commercial  interests  in  that  Empire. 

"  It  appears  to  me  that  one  most  important  question  for  the 
Associated  Chambers  is  to  obtain  accurate  information  as  to 
how  security  is  to  be  insured  to  commercial  men  who  may  be 
disposed  to  embark  their  capital  in  trade  enterprise  in  China. 

"  It  is  generally  admitted  that  there  is  a  great  possible  field 
for  business  undertakings ;  but  I,  personally,  feel  some  doubt 
as  to  whether  the  organization  of  the  Chinese  civil  and  military 
administration  is  sufficiently  complete  to  insure  adequate  pro- 
tection to  commercial  ventures. 

"  I  believe  it  would  be  of  immense  advantage  to  the  com- 
mercial classes  of  other  countries  if  they  could  obtain  a 
comprehensive  Report  on  this  question  from  a  competent 

"  I  want  to  get,  for  the  benefit  of  the  Associated  Chambers, 
a  report  from  a  non-official  source. 



**  At  the  same  time,  it  is  necessary  that  our  Commissioner 
should  possess  certain  qualifications. 

''  He  must  be  of  sufficient  position  to  warrant  the  expectation 
that  he  will  be  able  to  secure  ready  access  to  all  sources  of 

''  And  I  should  like  to  have  the  services  of  an  officer  of  naval 
or  military  experience,  since,  as  I  have  said,  I  believe  much 
turns  on  the  question  of  British  merchants  being  able  to  rely 
on  adequate  protection  for  their  enterprises  from  the  Chinese 
Government ;  and  I  should  wish  to  know  how  far  such  pro- 
tection can  be  regarded  as  effective. 

*'  I  have,  therefore,  to  ask  whether  your  engagements  would 
permit  of  your  visiting  China  at  as  early  a  date  as  may  be 
convenient  to  yourself ;  and  if  you  would  kindly  furnish  me 
with  a  Report  on  these  matters,  and  upon  any  other  subjects 
you  may  think  would  be  of  interest  and  advantage  to  the 
Associated  Chambers  of  Commerce. 

"  Believe  me, 
"  Yours  very  truly, 
"H.  Stafford  Northcote, 
'*  President  of  the  Associated 
"  Chambers  of  Commerce. 
"  To  Rear- Admiral 

"  The  Lord  Charles  Beresford,  M.P." 


Meeting  of  October  6,  1898 

"  My  Lord, — On  behalf  of  the  Committee  of  this  branch 
of  the  Association,  I  have  much  pleasure  in  welcoming  your 
Lordship  on  your  arrival  in  China,  not  only  in  view  of  the 
object  of  your  visit,  which  we  understand  is  directed  towards 
the  general  advancement  of  British  interests  in  this  country, 
but  also  on  the  score  of  your  Lordship's  personality,  which 
will  give  weight  to  the  opinions  which  you  may  form,  and  to 




the  representations  which  you  may  make  on  your  return 

"  We  believe  that  prior  to  your  Lordship's  departure  from 
England  you  were  in  communication  with  the  London  Com- 
mittee of  this  Association,  and  you  are  no  doubt  acquainted 
with  the  objects  to  which  our  work  is  directed — namely,  to 
represent,  express,  and  give  effect  to  our  views  and  opinions 
on  matters  affecting  British  interests  in  China,  whether  political 
or  commercial ;  and  you  are  no  doubt  also  acquainted  with 
the  more  important  questions  which  are  at  present  occupying 
our  attention.  In  asking  for  this  interview,  we  have  thought 
that  you  might  not  be  unwilling,  prior  to  your  visit  to  Peking, 
to  receive  some  expression  of  this  Committee's  views  regard- 
ing current  matters  of  interest 

"  It  is  unnecessary  to  say  that  at  the  present  moment  the 
further  development  of  recent  events  in  Peking  is  being  looked 
for  with  the  keenest  interest.  We  are  still  without  infor- 
mation sufficient  to  enable  us  to  judge  of  what  is  likely  to 
result  from  the  change  which  has  taken  place  in  the  Peking 
Government,  but  on  the  face  of  it  it  would  appear  that  the 
results  can  hardly  be  favorable  to  British  aims  and  interests 
in  China.  The  facts  before  us  appear  to  be  that  the  new 
party  in  China,  a  party  which  had  for  its  object  progress  and 
reform,  and  with  which  party  the  interests  of  Great  Britain 
surely  lay,  has,  for  the  time  being  at  any  rate,  been  crushed, 
and  that  the  old  ri^nu  which  we  connect  with  stagnation  and 
corruption  has  been  re-established.  In  such  case  it  is  difficult 
to  say  what  may  not  be  the  effect  upon  the  Empire  generally, 
for  undoubtedly  the  doctrines  of  the  '  new  movement '  are  now 
widely  spread  over  the  country,  and  are  not  only  favorably 
received  by  a  very  large  section  of  the  people,  but  have  also 
been  embraced  by  very  many  intelligent  officials  in  high  places; 
that  the  spirit  of  rebellion  may  be  stirred  seems  to  us  only  too 
likely— indeed,  there  is  already  rebellion  on  an  alarming  scale 
in  the  Southern  provinces,  and,  seeing  that  it  is  the  Cantonese 
element  in  the  Peking  Government  that  is  suffering  chiefly 
from  this  Manchu  reaction,  it  seems  fully  probable  that  the 



rebellious  movement  in  the  South  will  be  largely  strengthened. 
It  is  unnecessary  to  dwell  upon  the  disastrous  effects  which 
internal  troubles  must  have  upon  commerce,  in  which  Great 
Britain  is  so  vitally  interested. 

**  A  question  of  great  commercial  interest  at  the  present 
time  is  the  pending  revision  of  the  Tientsin  Treaty  of  1858, 
more  particularly  as  it  will  be  China's  object  in  the  revision 
to  obtain  a  substantial  increase  in  the  present  Customs  tariff. 
The  principle  of  a  revision  of  the  tariff  in  favor  of  China  has 
long  been  admitted  by  foreign  merchants  in  the  country;  but 
at  the  same  time  it  has  been,  and  is,  consistently  held  that  if 
increased  duties  at  the  ports  are  granted  to  China,  ample  safe- 
guards must  be  taken  that  merchandise,  having  once  paid 
these  duties,  shall  receive  in  the  interior  the  protection  from 
irregular  and  illegal  taxation  which  it  nominally  enjoys  under 
the  Treaties,  but  which  it  has  never  received.  It  is  impossible 
at  this  interview  to  enter  into  detail  as  to  this  vexed  question. 
Volumes  have  been  written  on  the  subject,  and  it  is  one  which 
has  no  doubt  been  studied  by  your  Lordship.  It  has  been, 
and  is  still,  urged  that,  internal  fiscal  reform  is  the  first  step 
necessary  towards  remedying  the  evils  complained  of,  but  how 
this  reform  was  to  be  brought  about  has  been  the  question 
which  has  for  years  bafHed  those  who  have  made  a  study  of  the 
matter.  There  is  not  only  the  difficulty  caused  by  the  whole- 
sale corruption  of  the  provincial  Governments,  which  the  re- 
stricted nature  of  foreign  intercourse  with  China  has  made  it 
impossible  to  check,  but  there  is  the  further  difficulty  arising 
out  of  the  practically  autonomous  nature  of  the  Governments 
of  the  provincial  units ;  interference  with  the  existing  irregular 
taxation  in  the  provinces  means  a  loss  of  provincial  revenue, 
and  in  the  event  of  an  increase  in  the  Imperial  duties,  which 
we  contend  must  be  dependent  upon  the  abolition  of  internal 
'squeezes,'  means  must  be  devised  for  satisfying  legitimate 
provincial  needs  out  of  the  Imperial  collection.  This  con- 
sideration has  not  been  lost  sight  of  in  suggestions  which  have 
been  put  forward  by  the  Association.  The  question  of  dealing 
with  the  difficulties  upon  which  we  have  touched  has,  however, 



assumed  a  new  complexion  in  view  of  the  changes  which  have 
taken  place  in  China  during  the  past  few  years.  Now  that  the 
Chinese  bubble  has  burst,  and  China  is  forced  to  pledge  her 
resources  to  meet  her  financial  needs,  there  seems  to  be  better 
opportunity  for  insistence  upon  foreign  interference  in  her 
internal  affairs.  It  has  been  urged  by  this  Association  that 
the  reforms  required  before  an  increased  tariff  be  conceded 
should  include : 

'*  (i.)  Extended  rights  of  residence  and  trade. 

"(2.)  The  opening  up  of  internal  communication  by 
means  of  railways,  and  by  the  opening  of  all  inland 
waters  to  free  navigation. 

"(3.)  Guarantees  to  be  taken  for  the  immunity  of  mer- 
chandise from  further  taxation  after  it  has  paid  the  duties 
fixed  by  Treaty. 

"With  regard  to  these,  some  measure  of  progress  has  al« 
ready  been  made  towards  opening  up  internal  communication, 
and  the  success  of  her  Majesty's  Minister  in  securing  the 
freedom  of  inland  navigation  is  heartily  acknowledged.  It  is, 
however,  still  contended  that  this  freedom  of  navigation  must^ 
to  be  effective,  carry  with  it  the  right  of  inland  residence ; 
there  must  be  freedom  to  establish  stations  under  foreign  con- 
trol for  the  effective  handling,  and  for  the  protection  of  the 
merchandise  which  is  carried  in  foreign  vessels ;  without  this 
right  the  freedom  of  inland  navigation  will  be  limited  to  a 
mere  extension  of  the  facilities  for  passenger  traffic.  The  case 
of  railways  is  somewhat  similar.  At  the  present  time  finan- 
ciers from  Europe  and  America  seem  to  be  jostling  for  so- 
called  *  concessions,'  but  concessions  without  control  and  man- 
agement are  likely  to  prove  disappointing!  Chinese  man- 
agement of  railways  is  scarcely  likely  to  be  less  corrupt  in  this 
respect  than  in  others,  and  foreign  control,  either  sole  or  in 
conjunction  with  a  minority  of  natives,  should  be  insisted  on, 
in  addition  to  the  Imperial  guarantee  for  ultimate  redemption 
of  loans  and  payment  of  interest  thereon.    In  this  connection 



there  again  arises  the  necessity  of  the  right  to  reside  inland, 
and  such  right  is  also  essential  for  the  protection  of  goods 
which  the  railways  carry.  Would-be  concessionaires  who  visit 
this  country,  hoping  to  obtain  something  that  they  can  float  at 
home  with  immediate  benefit  to  themselves,  may  rest  assured 
that  those  who  have  long  local  experience  are  alive  both  to 
opportunities  for  gain  or  loss  in  this  as  in  any  other  pursuits. 
In  connection  with  the  third  condition  which  the  Associa- 
tion puts  forward  for  an  increased  tariff — ^namely,  guarantees 
against  any  taxation  of  goods  beyond  that  fixed  by  Treaty — it 
has  been  urged  that  such  guarantee  can  best  be  found  by  ex- 
tending the  sphere  of  the  operations  of  the  Imperial  Maritime 
Customs — the  only  honest  source  of  revenue  that  China  pos- 
sesses. In  this  direction  an  important  beginning  is  being 
made  in  the  Yangtse  Valley  provinces,  where  the  collection 
of  likin  is  being  undertaken  by  the  foreign  Customs;  it  is 
earnestly  to  be  hoped  that  the  area  of  operations  will  be 
extended,  and  particularly  that  it  may  be  found  possible 
to  supervise  likin  collection  in  the  provinces  of  Kwangtung 
and  Kwang-si,  where  the  Treaty  rights  of  goods  have  been 
so  notoriously  ignored.  To  sum  up  this  part  of  the  ques- 
tion, we  are  convinced  that  until  extended  rights  of  internal 
residence  and  trade  are  conceded ;  until  guarantees  are  given 
for  the  management  of  the  vast  sums  of  money  that  are  be- 
ing invited  for  investment  in  China,  and  until  reforms  can 
be  effected  in  the  provinces  which  will  secure  merchandise 
from  irregular  taxation,  the  claim  of  the  Chinese  Govern- 
ment to  an  increase  in  the  Customs  tariff  should  not  be  ac- 
ceded to. 

*'  For  the  furtherance  and  protection  of  British  commercial 
interests,  it  has  again  and  again  been  urged  by  this  Associa- 
tion that  the  appointment  of  a  commercial  attach^,  or  of  at- 
taches, is  essential.  It  is  felt  that  the  multifarious  duties  of 
the  Consular  body,  and  the  fact  that  these  are  only  exercis- 
able at  fixed  stations,  render  it  impossible  for  the  members  of 
that  body  to  give  the  care  to  commercial  matters  which  the 
magnitude  of  British  interest  requires;  and,  moreover,  incon- 



sideriDg  this  question  the  exceptional  difficulties  which  sur- 
round all  matters  in  China  are  specially  to  be  remembered 
Our  representations  on  this  subject  have  been  apparently  ad- 
mitted to  be  sound  in  that  a  commercial  attach^  has  been 
appointed,  but,  seeing  that  the  office  is  merged  in  that  of  Con- 
sul-General  at  Shanghai,  the  appointment  is  useless.  Our 
conception  of  the  position  and  duties  of  a  commercial  attach^ 
has  been  several  times  expressed;  he  should  be  of  definite 
rank  sufficient  to  enable  him  to  command  the  respect  and  at- 
tention of  the  high  provincial  officials ;  he  should  be  free  to 
move  about  the  country  at  will,  unhampered  by  other  work, 
and  he  should  be  in  continual  touch  both  with  the  Chinese 
officials  and  with  his  own  nationals.  In  a  communication 
from  this  branch  of  the  Association,  dated  two  years  ago,  we 
stated  that  our  object  in  pressing  for  the  appointment  of  a 
commercial  attach^  was  '  not  limited  to  the  petty  details  of 
official  obstruction,  but  comprehended  a  system  of  reform 
calculated  to  raise  and  strengthen  the  Chinese  Empire  and 
simultaneously  promote  the  welfare  of  British  commerce  and 
British  interests.'  These  views  we  repeat  to-day,  but,  seeing 
the  enormous  difficulties  which  attend  the  procuring  of  reli- 
able information  in  China  (difficulties  which  seem  to  have  be- 
come very  plainly  apparent  during  the  changing  events  of  last 
year),  we  would  now  go  further  and  urge  the  establishment  of 
a  complete  service  which  would  continue  the  duties  of  the 
special  case  of  commercial  matters  with  those  of  obtaining  in- 
telligence. So  far  as  we  are  aware,  the  British  Government, 
despite  its  vast  interests  in  this  Empire,  is  without  anything 
approaching  an  Intelligence  Department,  and  we  believe  that 
the  establishment  of  such  a  department  would  immensely 
strengthen  the  hands  of  her  Majesty's  Minister  in  Peking. 

"  In  an  interview  such  as  this  it  is  impossible  to  do  more 
than  touch  on  the  veriest  fringe  of  the  many  reforms  which  have 
constantly  been  urged  as  essential  for  the  benefit  both  of  China 
herself  and  of  foreign  interests  in  the  Empire  ;  the  corruption 
which  saturates  every  department  of  government  throughout 
the  length  and  breadth  of  the  country  makes  fiscal  reform  a 
3G  465 


first  necessity.  The  Reports  published  recently  by  Mr.  Jamie- 
son  and  Mr.  Brenan  contain  official  record  of  the  vastness  of 
this  corruption,  and  though  had  China  been  able  to  maintain 
her  exclusive  position,  she  might  have  continued  for  decades 
longer  unchanged,  yet  her  altered  circumstances  cannot  fail  to 
bring  disaster,  unless  she  sets  her  house  in  order  on  lines  con- 
sonant  with  the  ideas  and  wishes  of  the  Western  nations  from 
whom  she  cannot  now  detach  herself.  Among  the  reforms 
which  have  been  advocated  may  be  mentioned :  The  necessity 
for  a  national  coinage ;  reform  in  the  method  of  the  collection 
of  the  land-tax ;  the  removal  of  the  restrictions  on  the  export 
of  grain ;  modification  of  the  laws  governing  the  salt  monopoly ; 
registration  and  protection  of  trade-marks,  and  the  establish- 
ment of  a  law  of  copyright ;  also  the  establishment  of  railway 
and  mining  bureaus,  placing  these  enterprises  on  a  uniform 
and  organized  basis. 

"  We  do  not  propose  on  this  occasion  to  occupy  your  Lord- 
ship with  any  expression  of  our  views  on  the  broad  question  of 
the  political  situation  which  has  arisen  in  China,  nor  to  criti- 
cise the  action  of  our  Government  in  connection  with  it.  This 
much,  however,  we  may  say — namely,  that  there  seems  to  us 
to  have  been  a  regrettable  want  of  stability  in  the  policy  which 
has  been  pursued.     We  seem  to  have  left  the  policy  of  the 

*  Integrity  of  China,'  and,  walking  through  the  *  Open  Door,'  to 
have  arrived  at  the  policy  of  the  *  Sphere  of  Influence.'  We 
think  that  the  long  neglect  of  Chinese  affairs  by  our  Govern- 
ment, a  neglect  probably  due  to  a  mistaken  feeling  that  British 
influence  in  the  Far  East  reigned  supreme,  coupled  with  a  fal- 
lacious belief  in  the  power  of  China  herself,  has  been  the  cause 
of  an  indecisive  policy  which  has  apparently  allowed  us  to  fall 
between  two  stools.  Great  Britain's  'Sphere  of  Influence' 
should  be  wherever  British  trade  preponderates,  and  with  the 

*  Open  Door '  for  other  nations  all  peoples  would  have  equal 
opportunity ;  but  this  ideal  can  never  be  attained  without  res- 
olute determination  on  the  part  of  the  British  Government  to 
lead  and  not  to  follow  in  the  councils  at  Peking.  On  these 
matters,  however,  your  Lordship  will,  no  doubt,  form  your  own 



conclusions  during  your  visit,  which  we  trust  will  be  enjoyable 
to  yourself,  and  will  achieve  its  object  of  benefit  to  British  in- 
terests in  the  Far  East. 

"L.  J.  Dudgeon,  Chairman. 
"To  the  Right  Honorable 
"Admiral Lord  Charles  Beresford,  C.B.,  M.P. 
"  Shanghai,  October  4,  1898.'' 


Address  of  October  7,  1898 

"  My  Lord, — On  behalf  of  the  Shanghai  General  Chamber 
of  Commerce  the  Committee  have  the  honor  of  welcoming  you. 

"  As  a  General  Chamber  of  Commerce  representing  all  for- 
eign nationalities,  we  greet  you  as  representing  the  Chambers 
of  Commerce  of  Great  Britain,  and  we  can  all  do  so  without 
hesitation,  for  under  the  Favored-nation  Clause  no  one  nation 
benefits  more  than  another  in  their  commercial  treaties  with 
the  country  in  which  we  now  are. 

"  On  this  principle  the  Shanghai  Chamber  of  Commerce  is 
established,  and  has  for  many  years  been  a  factor. 

"We  will  not  weary  your  Lordship  with  retrospect  more 
than  to  remark  that,  had  Treaties  been  observed  in  the  past, 
we  should  have  heard  less  of  likin  and  loti  shui,  and  that  no 
revision  of  Treaty,  be  it  based  on  the  many  reports  this  Cham- 
ber has  already  fathered,  or  on  any  inquiries  yet  to  come,  can 
be  permanently  of  advantage  unless  it  combines  conditions, 
and  indeed  exactions,  that  its  terms  shall  be  adhered  to,  not 
only  technically,  but  in  a  common-sense  interpretation. 

"Our  views  on  existing  Tariffs  are  recorded  in  Reports  of 
Sectional  Committees  drawn  up  in  1896,  which  our  Secretary, 
Mr.  Drummond  Hay,  will  hand  you ;  but  though  then  com- 
plete as  far  as  we  could  see,  they  may  now  need  revision,  and 
in  view  of  the  probability  that  the  Minister  for  Great  Britain 



will  be  the  first  Minister  seriously  engaged  in  such  work,  we 
have  mentioned  to  his  Excellency  that,  until  this  Chamber  has 
some  knowledge  of  the  views  held  by  the  Consular  and  Cus- 
toms officials  on  the  Reports  we  took  such  labor  to  compile, 
we  can  say  no  more  than  to  suggest  that  a  round-table  con- 
versation of  a  few  Consular,  Customs,  and  mercantile  rep- 
resentatives might  pave  the  way  and  clear  the  atmosphere  of 
many  cloudy  bedarkenings. 

"  That  all  nationalities  will  agree  to  a  more  productive  scale 
of  Import  Duties,  provided  there  are  proper  and  really  binding 
guarantees  of  an  end  to  inland  'squeezes*  and  irregular  im- 
positions, is,  I  think,  certain,  but  that  is  a  condition,  and  it  is 
well  we  should  all  understand  this. 

"  On  the  other  hand,  if  China's  true  interests  are  to  be  con- 
sidered, considerable  amelioration  of  Inland  and  Export  taxa- 
tion on  Exports  is  a  sine  qu&  nan, 

'*  Taking  the  political  aspect,  which  we,  as  an  International 
Chamber,  do  not  attempt  to  define,  we  may,  in  the  interests  of 
all  nationalities,  contend  that  in  a  commercial  sense  we  know 
no  geographical  *  Spheres  of  Influence,'  but  advocate  equal 
rights  and  equal  opportunities  for  all  who  have  integrity  and  per- 
severance necessary  to  carry  their  initiative  to  successful  ends. 

''  We  have  little  time  to  discuss  political  matters  with  your 
Lordship,  but  while  alive  to  the  fact  that  political  issues  may 
outweigh  the  commercial,  and  necessitate  here  and  there  de- 
pots of  nourishment  for  those  forces  on  which  we,  as  foreigners, 
are  compelled  to  rely  in  countries  which  we  sincerely  regret 
are  now  retarded  in  adopting  Western  civilization  and  usages, 
we  see  no  reason  for  commercial  jealousies ;  and  when  you 
consider  that  for  several  decades  of  years  this  International 
or  General  Chamber  of  Commerce  has  on  these  lines  done 
service,  all  will  admit  that  proportional  tradal  influence  de- 
mands consideration. 

"  Dealing  thus  generally  with  the  points  we  have  alluded  to, 
your  Lordship  will  bear  with  us  while  we  mention  one  or  two 
more  local. 

"You  will  have  heard,  my  Lord,  of  the  Woosung  Bar. 



Though  the  number  of  our  ships  has  greatly  increased  of  late 
years,  many  millions  have  been  exacted  from  foreign  ship- 
owners in  the  shape  .of  tonnage  dues !  This  Chamber  has 
raised  and  spent  money  in  formulating  proposals  by  which  it 
is  hoped  that  this  important  Treaty  port  may  maintain  its 
waterways,  the  Yangtse  and  Whangpoo  Rivers ;  but  the  im- 
provements, remedial  and  novel,  cost  money,  and  we  see  no 
reason  why  those  who  pay  the  piper  should  not  name  the  tune. 
We  therefore  demand  a  Conservancy  Board  here,  on  which 
mercantile  and  shipping  representatives  should  adjudicate  and 
direct,  along  with  Consular  and  Customs  officials,  the  expen- 
diture of  money  which  is  solely  derived  from  the  foreign  mer- 
chant and  ship-owner.  In  short,  in  this,  as  in  the  question 
of  tariffs  on  goods,  we  maintain  that  politics,  whether  Tory  or  '"^n^.  -  ^'^ 
Liberal,  and  whether  British,  German,  American,  Russian,  Jap- 
anese, or  any  other  country,  have  no  part,  for  the  fact  remains 
in  our  minds  that  Taxation  and  Representation  are  inseparable. 

''My  Lord,  we  may  say  another  word  to  strengthen  our 
position  in  regard  to  expenditure  of  tonnage  dues  derived 
from  foreign  ships,  when  we  tell  you  that  for  years  three- 
tenths  of  these  receipts  have  been  diverted  to  purposes  other 
than  those  we  believe  were  obviously  intended  by  Treaty.  We 
admit  that  departmental  expenses  of  harbor  administra- 
tion, etc.,  and  funds  for  light -house  purposes,  are  proper 
charges,  but,  apart  from  these,  moneys  received  from  ship- 
ping should  be  used^r  shipping,  and  conservancy  expenses 
might  easily  be  met  were  this  principle  admitted  and  adopted. 

"In  a  somewhat  similar  light  we,  as  representing  all  foreign 
nations,  have  taken  up,  at  the  request  of  our  Municipality, 
the  overshadowing,  important  subject  of  the  extension  of  our 
settlement  A  settlement  defined  fifty  years  ago  as,  perhaps, 
one  and  a  half  miles  wide  and  a  mile  and  a  quarter  deep,  is 
no  use  for  us.  We — that  is,  foreigners — have  extended  four  or 
five  miles  each  way,  and  yet  in  the  area  in  which  we  live  and 
move  and  have  our  being  there  are  drains  and  stinks  innumer- 
able, though  we  spend  money  in  making  roads* 

''The  Chinese  reply  ('  that  if  we  had  kept  for  foreigners 



alone  the  area  assigned  to  us ')  is  all  nonsense.  If  we  bad 
done  so,  we  should  hav6  had  no  country  roads,  no  country 
houses,  no  nothing! — merely  a  place  like  Shameen,at  Canton, 
z,  prison  for  foreigners,  surrounded  by  masses  of  natives 
living  on  foreigners,  but  in  slums  worse  even,  far  more 
numerous  and  larger,  than  those  we  now  assert  are  a  danger 
both  to  health  and  order.  Not  only  out  in  the  Bubbling  Well 
and  Yangtzepoo  districts  do  we  want  the  extension,  but  also 
over  at  Pootung,  where  from  Tungkadoo  to  down  below  the 
harbor  limits  foreigners  have  built  wharves  and  docks  and 
factories,  which,  it  is  almost  inconceivable,  are  not  within  our 
municipal  jurisdiction !  We  held  a  public  meeting  on  this 
'  extension  '  subject  in  June  last,  and  the  printed  Report,  with 
the  sanitary  medical  news  it  contains,  will,  we  hope,  not  be 
too  long  for  your  Lordship  to  study. 

"  Charles  Alford,  Chairman." 


Resolution  of  October  24,  1898 

"That  this  meeting  of  the  Tientsin  Chamber  of  Commerce 
welcomes  the  mission  of  Rear- Admiral  Lord  Charles  Beres- 
ford,  from  the  Associated  Chambers  of  Commerce  of  Great 
Britain,  and  unanimously  desires  to  record  its  conviction  that 
the  policy  of  preserving  the  integrity  of  China,  with  a  guar- 
antee of  an  '  Open  Door,*  a  fair  field,  and  increased  trading 
facilities  for  all  countries,  is  the  best  and  most  sound  for  all 
foreign  trading  communities  in  China,  and  hereby  desires  Lord 
Charles  Beresford  to  convey  the  resolution  of  this  Chamber. 

(Signed)    "W.  W.  Dickinson  (Chairman). 
"  John  H.  Osborns  (Hon.  Sec). 
"M.  March. 
"E.  Hegh. 
"J.  N.  Dickinson. 
"Charles  H.  Ross. 
"  D.  H.  Mackintosh. 
"R.  Lurry." 



Address  of  Niruember  7,  1898 


"  My  Lord, — I  have  great  pleasure  in  handing  you  herewith 

two  copies  of  a  series  of  resolutions  passed  unanimously,  after 

full  and  free  discussion,  at  a  meeting  of  British  residents  this 


"  Further,  I  am  instructed  by  the  meeting  to  request  you  to 

be  good  enough  to  communicate  one  copy  of  these  resolutions 

to  Lord  Salisbury,  with  such  comments  as  you  may  consider 


"I  am,  Sir, 

"Your  obedient  servant, 

"  J.  J.  Fredk.  Bandinel, 

"  Chairman  of  the  Meeting. 
"  To  Rear- Admiral 

"  Right  Hon.  Lord  Charles  Beresford,  C.B.,  at  New- 


•*  Copy  of  Resolutions 

"  Unanimously  adopted  at  a  meeting  of  British  Residents  at 
the  Port  of  Newchwang,  North  China,  on  the  7th  Novem- 
ber, 1898. 

"  We  advocate : 

"  I.  Obtaining  a  British  concession  on  the  north  bank  of 
the  river — that  is  to  say,  on  the  side  opposite  to  the  present 

"  2.  Forming  the  East  end  of  the  town  within  the  walls  into 
a  foreign  (not  necessarily  British)  settlement. 

"3.  The  right  of  owning  land  in  the  interior,  and  establish- 
ing there  filatures  and  other  similar  enterprises  worked  by  for- 
eign machinery. 

"  4.  The  right  of  working  mines  in  any  part  of  the  three 
provinces  where  Chinese  or  other  foreigners  may  or  do  work 
them,  and  on  equally  favorable  terms. 

"  5.  The  maintenance  of  our  right  to  inland  navigation,  with 



power  to  stop  at  any  town  or  village  on  the  banks,  equally  with 
those  enjoyed  on  any  river  iii  China. 

''6.  That  the  rights  and  property  of  the  Protestant  mission- 
aries and  their  converts  should  be  maintained  intact  as  here- 
tofore according  to  the  rights  existing  by  the  Treaty  of  Tient- 
sin and  the  Edict  of  1891. 

"  7.  That  a  British  Consular  Agent  be  permanently  stationed 
in  Kirin,  as  formerly  in  Chungking. 

"  8.  We  deprecate  most  strongly  the  annexation  of  this  port, 
and  of  any  of  the  three  provinces,  by  any  foreign  Power,  and 
we  rely  on  the  British  Government  to  maintain  the  *  Open 

'^9.  We  object  to  the  right  claimed  and  exercised  by  the 
Russians  of  landing  railway  material  without  examination  or 
payment  of  duty,  especially  as  this  diminishes  the  security  on 
which  money  has  been  loaned  by  British  subjects  to  the  Chi- 
nese Government. 

"  10.  We  view  with  apprehension  the  establishment  of  Rus- 
sian military  posts  throughout  the  provinces  as  at  Kirin. 

"11.  That  the  Russian  Government  should  be  requested 
to  appoint  a  Consul  at  this  port,  in  view  of  the  large  and  in- 
creasing Russian  interests,  and  the  possibility  of  complications 
arising  which  would  demand  immediate  conference  between 
Consular  officials  on  the  spot. 

"  12.  That  a  copy  of  these  resolutions  be  sent  by  the  Chair- 
man to  Lord  Charles  Beresford,  also  another  copy  with  the 
request  that  he  will  communicate  the  same  to  Lord  Salisbury, 
and  that  another  copy  be  sent  to  her  Majesty's  Minister  at 
Peking.  J.  J.  Frederick  Bandinel, 

"  Chairman  of  the  Meeting." 


Address  of  November  16,  1898 

"  My  Lord, — I  have  the  honor  to  inform  you  that  the  Com- 
mittee of  this  Chamber  have  passed  the  following  resolution, 



which  is  in  general  confirmation  of  the  views  verbally  ex- 
pressed at  their  recent  interview  with  your  Lordship  : 

*' '  That  in  the  opinion  of  this  Committee  the  interests  of 
both  China  and  of  the  Foreign  Powers  having  commer- 
cial relations  with  her  require  that  the  equality  of  rights 
as  secured  by  existing  Treaties  be  strictly  safeguarded 
against  any  changes  of  an  exclusive  or  preferential  nature 
in  favor  of  different  nations  in  any  part  of  the  Empire ; 
and,  further,  that  it  is  desirable  that,  in  order  to  effect 
this  end,  a  general  agreement  be  entered  into  between  the 
Powers  interested,  guaranteeing  the  equality  of  commer- 
cial rights  and  privileges  to  all  nations  alike.' 

''I  have  the  honor  to  be, 

"  Your  Lordship's  obedient  Servant, 

"Drummond  Hay,  Secretary. 
"  Rear-Admiral  Lord  Charles  Beresford, 
"  R.N.,  C.B.,  M.P.,  etc" 



Meeting  of  November  19,  1898 

"  My  Lord, — I  have  the  honor  to  transmit  to  your  Lord- 
ship copy  of  a  series  of  resolutions  unanimously  adopted  by 
the  General  Committee  of  this  Chamber  at  a  special  meeting 
held  OD  the  19th  inst. 

"  The  resolutions  embody  the  views  and  recommendations 

of  the  Chamber  in  connection  with  the  present  situation,  vis-d^ 

vis  China  and  the  new  policy  latterly  developed  by  the  Treaty 


''  I  have  the  honor  to  be,  my  Lord, 

*'  Your  most  obedient  Servant, 

"  R.  M.  Gray,  Chairman. 

'*  To  Admiral  Lord  Charles  Beresford, 

"  M.P.,  etc.,  etc." 



^'With  reference  to  the  Mission  of  Lord  Charles  Beresford 
to  China,  this  Chamber,  having  considered  the  situation,  po- 
litical and  commercial,  wish  to  record  the  following  opinions 
and  recommendations: 

"  I.  In  the  interests  of  commerce  it  is  vitally  necessary  that 
the  position  of  the  Colony  of  Hong  Kong,  as  the  natural  out- 
let and  focus  for  the  trade  of  the  Two  Kwang  Provinces, 
should  never  be  lost  sight  of  in  considering  any  claims  to 
'  Spheres  of  Influence '  that  may  be  put  forward  either  now  or 
in  the  future. 

*'  2.  Hong  Kong,  through  a  line  of  railway,  connecting  first 
with  Canton,  and  eventually  with  Hankow  and  her  sister  cities 
Wuchang  and  Hanyung,  is  in  a  position  to  directly  tap  the 
very  heart  of  commercial  China. 

*'  3.  The  trade  of  Hong  Kong,  now  roughly  estimated  at 
some  fifty  millions  sterling  per  annum,  may,  when  the  river- 
ways  of  South  China  are  opened  and  the  railway  to  the  Yangtse 
Valley  becomes  an  accomplbhed  fact,  reasonably  be  expected 
to  expand  immensely. 

"  4.  The  geographical  situation  of  Hong  Kong,  lying,  as  it 
does,  half-way  between  India  and  Japan,  on  the  very  borders 
of  one  of  the  most  populous  provinces  of  China,  and  at  the 
mouth  of  one  of  the  greatest  systems  of  inland  navigation  in 
Asia,  is  of  supreme  importance  to  British  trade,  and  any  scheme 
or  policy  that  loses  even  partial  sight  of  its  unique  advantages 
ought  not  to  commend  itself  to  the  attention  of  the  British 

"  5.  That,  however  important  the  trade  of  the  United  King- 
dom with  Central  China,  it  must  not  be  forgotten  that  the  key 
to  British  influence  and  prestige  in  the  Far  East  reposes  in 
the  Colony  of  Hong  Kong. 

"  The  Chamber,  therefore,  respectfully  urge  that  while 
it  is  of  the  utmost  importance  to  secure  an  *  Open  Door ' 
for  British  and  foreign  trade  in  the  Yangtse  Valley  and  in 
the  North  of  China,  it  is  imperative  that — 

"(tf)  Trade  throughout  China  should  be  freed  from  all 



inland  imposts,  one  tax  payable  at  the  port  of  entry  sufficing 
to  frank  goods  to  their  destination. 

'*  {d)  That  the  dual  system  of  Customs  should  be  abolished, 
and  a  contribution  to  the  Provincial  treasury  be  made  out  of 
the  revenues  of  the  Imperial  Maritime  Customs. 

"  (c)  In  view  of  the  lawless  condition  of  the  Two  Kwang, 
it  should  be  strongly  impressed  on  the  Chinese  Government 
that  vigorous  measures  be  promptly  taken  to  put  down  brig- 
andage and  restore  order  throughout  the  provinces. 

**(d)  That,  as  part  of  the  grand  scheme  for  throwing  open 
to  foreign  trade  the  entire  waterways  of  China,  means  be  at 
once  taken  to  secure  the  opening  of  the  West  River  above 
Wuchow-fu  and  also  the  North  and  East  Rivers  along  their 
entire  navigable  courses/' 

Jiesolutioni  of  November  22,  1898 

The  following  are  the  recommendations  of  this  Chamber: 

"  I.  Strict  and  immediate  enforcement  of  the  inland 
navigation  rules. 

''  2.  Right  of  foreigners  to  reside  in  the  interior,  un- 
fettered as  regards  trade,  and  to  buy  land  in  the  vicinity 
of  Treaty  ports. 

"3.  Amelioration  of  condition  of  certain  barriers  in 
Riangsu,  notably  that  at  Huai-kuan  on  the  Grand  Canal. 

''  4.  Revision  of  the  Yangtse  Regulations. 

''5.  A  more  hearty  and  willing  co-operation  on  the  part 
of  H.M.'s  Consuls  for  the  furtherance  of  trade  and  pro- 
tection of  British  interests." 


Address  of  November  25,  1898 

"  My  Lord,— As  Chairman  of  the  deputation  and  other  Brit- 
bh  reudents  appointed  to  wait  upon  you,  I  beg  to  present  to 



your  Lordship  this  expression  of  the  pleasure  your  visit  to  this 
port  afiFords  us,  and  to  invoke  your  powerful  influence  at  home, 
both  in  Parliament  and  with  the  Government,  with  a  view  to 
the  extension  of  the  privileges  of  British  residents  in  Central 

*'  British  subjects  desire : 

''  (i.)  Full  liberty  to  establish  in  the  interior  manufact- 
uring and  other  industrial  concerns,  particularly  in  tea- 
growing  districts. 

"  (2.)  To  open  and  work  mines  on  equally  favorable 
terms  with  the  natives. 

"(3.)  That  the  rights  of  Christian  missionaries  and 
their  converts  in  the  interior  and  elsewhere  be  fully  rec- 

''(4.)  That  ample  protection  be  accorded  British  sub- 
jects in  all  legitimate  enterprises  in  China. 

*'  (5.)  That  special  attention  be  given  to  the  French  and 
Russian  activity  in  Central  and  Western  China,  especially 
in  view  of  the  fact  that  an  armed  French  force  is  at  pres- 
ent in  the  West,  and  that  a  railway  is  now  being  construct- 
ed opening  up  direct  communication  between  Central 
China  and  the  Russian  sphere  in  the  North. 

''  (6.)  That  a  British  naval  force  be  stationed  perma- 
nently in  the  Yangtse  as  a  demonstration  of  the  intention 
to  protect  her  interests. 

"(7.)  That  Hunan  be  opened  to  trade  and  missionary 
work,  which  shall  have  the  fullest  protection  throughout 
the  province,  and  that  a  British  Consul  be  appointed  to 
reside  at  Changsha,  the  capital. 

"(8.)  That  an  understanding  be  arrived  at  with  the 
United  States  of  America  by  which  both  nations  may 
take  concerted  action  against  the  closing  of  any  doors  to 
missionary  work  and  trade  now  open  in  the  Empire,  and 
that  the  two  nations  reopen  any  doors  that  may  have 
been  closed. 

''The  British  community  resident  in  this  part  of  the  Yang- 



tse  Valley,  in  the  centre  of  the  section  of  the  Empire  specially 

guaranteed  by  China  to  Great  Britain,  urge  a  close  attention 

on  the  part  of  the  British  Government  to  the  development  of 

this  important '  sphere  of  British  influence/  for  its  possibilities 

and  resources  are  almost  unlimited. 

*'  The  deputation  confidently  anticipate  that  the  result  of 

your  Mission  to  the  Far  East  will  promote  a  still  more  rapid 

opening  up  of  this  part  of  the  Empire  of  China  to  Christianity, 

and  all  forms  of  Western  civilization. 

''  I  am,  my  Lord, 

''  For  and  on  behalf  of  the  Community, 

"Your  obedient  Servant, 

"  Edward  S.  Little, 

"  Chairman  of  the  Deputation. 
"  To  Rear- Admiral 

"  Right  Hon.  Lord  Charles  Beresford,  C.R" 


Resolutions  of  December  5,  1898 

"My  Lord, — I  beg  to  hand  you  herewith  a  copy  of  res- 
olutions passed  unanimously  at  a  meeting  of  the  British 
Mercantile  Community  of  this  concession,  and  to  request  that 
you  will  call  the  attention  of  her  Majesty's  Government  to 
the  subjects  mentioned  therein,  which  are  of  the  greatest  im- 
portance to  all  residents  and  traders  here. 

"  I  am,  my  Lord, 
"  Your  obedient  Servant, 

"  C.  £.  Geddes, 
"  Chairman  of  above  Meeting. 
"  To  the  Right  Honorable 

"  Admiral  Lord  Charles  Beresford, 
"  R.N.,  C.B.,  M.P." 

"  Resolutions  passed  at  a  meeting  of  the  British  Mercantile 
Community,  held  at  Hankow  on  the  3d  December,  189S : 

"  I.  We  believe  that  it  is  largely  in  consequence  of  the  lack 



of  firmness  on  the  part  of  her  Majesty's  Government  that 
this  country  is  now  plunged  into  such  a  state  of  political  tur- 
moil that  the  Chinese  merchants  have  practically  ceased  to 
do  business.  The  Local  Governments  in  this  part  of  the 
Empire,  impoverished  by  the  loss  of  revenue  derived  from 
likin,  are  no  longer  able  to  control  the  people,  and  the  general 
feeling  is  that  it  is  only  the  want  of  a  leader  that  prevents  an 
uprising  of  a  dangerous  character.  And  inasmuch  as  the  na- 
tive authorities  are  not  in  a  position  to  afford  us  security  and 
protection  to  carry  on  our  trade  in  the  future,  as  we  have  done 
heretofore,  we  call  upon  her  Majesty's  Government  to  extend 
to  us  the  protection  to  which  we  are  entitled  as  British  subjects. 

'^  2.  We  consider  it  of  the  utmost  importance  that  the  further 
opening  up  to  trade  of  the  waterways  of  the  Yangtse  and  its 
great  tributaries,  the  Tung  Ting  Lake,  etc.,  on  the  principle  of 
the  'Open  Door,'  free  to  all,  should  be  carried  out  with  as  little 
delay  as  possible,  and  permission  obtained  for  foreigners  to 
trade  direct  with  and  reside  in  the  large  cities  within  this  dis- 
trict on  similar  terms  as  with  the  existing  Treaty  ports.  We 
would  suggest  that  the  establishment  of  a  Consulate  at  Chang- 
sha,  and  the  opening  of  that  city  as  a  Treaty  port,  would  be  a 
measure  of  great  importance  towards  securing  a  standing  in 
the  province  of  Hunan. 

"3.  Since  the  establishment  of  the  Treaty  port  of  Hankow, 
in  186 1,  British  subjects  have,  from  time  to  time,  bought  land 
outside  the  limits  of  the  British  concession  under  Chinese  title- 
deeds.  These  deeds  have  been  duly  registered,  and  bear  the 
Consular  stamp  of  her  Majesty's  Government.  Since  the  war 
with  Japan  proved  the  weakness  of  the  Chinese,  advantage 
has  been  taken  by  the  French  and  Russian  Governments  to 
seize  upon  such  property  as  above  mentioned,  to  the  loss  and 
detriment  of  British  subjects,  claims  to  the  ownership  of  land 
lodged  with  the  French  and  Russian  Consuls  having  been  re- 
jected and  declared  invalid  without  explanation  or  the  possi- 
bility of  appeal.  The  result  of  this  has  been  to  lessen  in  Chi- 
nese opinion  the  value  of  the  British  Consular  stamp  on  a 
deed,  a  fact  which  will  have  a  most  serious  effect  on  British 



interests  here ;  and  the  native  officials  now  refuse  to  register 
deeds  sent  in  by  her  Majesty's  Consul,  to  which  they  offer  no 
objection  if  the  application  is  made  through  the  French  or 
Russian  Consul. 

*'  C.  E.  Geddes,  Chairman." 

Resolution  of  December  22,  1898 

''  That  the  General  Chamber  of  Commerce  of  Foochow  de- 
sires to  avail  itself  of  the  opportunity  of  your  Lordship's  visit 
to  place  before  you  its  endorsement  of  the  views  already  ex- 
pressed by  the  other  Chambers  of  Commerce  in  China,  viz. : 

"  I.  That  the  '  Sphere  of  Influence'  policy,  so  called,  would 
be  fatal  to  the  interests  of  British  Trade  and  Commerce  in 

''2.  That  we  earnestly  hope  that  the  declaration  of  her 
Majesty's  Government  with  regard  to  the  maintenance  of  the 
'Open  Door'  will  be  strictly  adhered  to. 

"  3.  That  in  order  to  keep  the  *  Open  Door'  for  the  trade  of 
all  nations,  it  is  necessary  that  the  integrity  of  China  should 
be  preserved." 


Address  of  December  23,  1898 

''  My  Lord, — I  have  the  honor  to  transmit  to  your  Lordship 
the  following  resolutions,  unanimously  carried  at  the  meeting 
of  the  British  Members  of  this  Chamber,  held  this  morning, 
at  which  your  Lordship  was  present : 

*' '  I.  That  this  Chamber  is  of  opinion  that  British  trade 
at  Amoy  would  be  considerably  enhanced  were  the  right 
of  residence  in  the  interior  allowed,  and  likin  either 
abolished  or  compounded  in  one  payment. 



***2.  That  the  best  thanks  of  this  meeting  are  offered 
to  the  Associated  Chambers  of  Commerce  for  having  sent 
out  a  Mission  to  inquire  into  British  Trade  and  Com- 
merce, and  that  it  is  hoped  that  the  Mission  to  China  will 
result  in  considerable  benefit  to  British  merchants.' 

**  I  have  the  honor  to  be, 

"  My  Lord, 

"  Your  most  obedient  Servant, 

"J.  J.  Dunne, 
"  Secretary. 
"To  Rear- Admiral 
"  Right  Hon.  Lord  Charles  Beresford, 
"  C.B.,  M.P.,  etc.,  etc." 


Resolution  of  December  24,  1898 

"  That  this  meeting  trusts  that  her  Majesty's  Government 
will  see  the  necessity  for  taking  more  vigorous  measures  to 
maintain  and  promote  British  influence  in  China." 


Meeting  0/  December  28,  1898 

At  a  meeting  of  the  Committee  of  the  Hong  Kong  Branch 
of  the  Association,  held  at  the  City  Hall,  on  the  28th  Decem- 
ber, 1898 — present,  J.  J,  Francis,  Q.C.,  in  the  chair,  the  Hon- 
orable C.  P.  Chater,  C.M.G.,  Thomas  Jackson,  C.  S.  Sharp, 
E.  W.  Mitchell,  and  F.  Henderson  (Hon.  Sec.) — the  following 
resolutions  were  unanimously  passed : 

"  Resolved — 

"  I.  That  unless  some  definite  policy  is  adopted  by  the 
British  Government  in  connection  with  affairs  in  China,  and 



unless  prompt  action  is  taken  to  give  effect  to  that  policy, 
British  trade  and  British  influence  in  China  are  in  serious 
danger  of  diminution. 

''  2.  That  the  policy  embodied  in  the  term  *  Spheres  of  In- 
fluence '  tends  to  the  eventual  dismemberment  of  the  Chinese 
Empire,  can  only  lead  to  war,  and  ought  to  be  set  aside. 

''3.  That  the  policy  embodied  in  the  phrase  the  'Open 
Door '  ought  to  be  clearly  defined  and  strictly  enforced,  even 
at  the  risk  of  war. 

"  4.  That  the  policy  of  the  *  Open  Door,'  in  our  opinion, 
means  that  all  rights  and  privileges  obtained  by  any  one 
Power,  under  treaty  or  convention  with  China,  should  be 
common  to  all  Powers  and  their  subjects  throughout  the  Em- 
pire of  China ;  that  the  action  of  any  nation  in  endeavoring 
to  obtain  from  the  Chinese  Government  any  exclusive  rights 
or  privileges  should  be  deemed  an  unfriendly  act,  and  that 
Great  Britain  should  call  upon  the  Chinese  Government  to  re- 
fuse to  grant  any  exclusive  rights  to  any  Power,  and  should 
support  China,  by  force  if  necessary,  in  her  refusal. 

"5.  That  if  any  nation  has  any  reasonable  claim  to  exclu- 
sive influence  in  the  Southern  provinces  of  China — Kwang- 
tung,  Kwangsi,  and  Yunnan — that  Power  is  Great  Britain ; 
but  that  Great  Britain  claims  no  such  exclusive  privilege, 
and  will  permit  no  other  Power  to  exercise  any  exclusive 

"6.  That  the  Revenue  system  of  China  is  the  greatest  of 
all  obstacles  to  the  improvement  of  trade,  to  the  increase  of 
manufactures,  to  the  opening  of  mines,  and  the  construction 
of  railways  in  China,  and  that  the  British  Government  should 
bring  all  its  power  and  influence  to  bear  on  the  Imperial 
Government  to  compel  the  unification  of  the  finances  of  the 
Government,  Imperial  and  Provincial,  in  the  hands  of  a  Special 
Service,  entirely  manned  by  Europeans  and  worked  on  the 
plan  of  the  Imperial  Maritime  Customs. 

'*  7.  That  with  the  unification  of  the  collection  of  revenues 
in  the  hands  of  a  special  department,  as  above,  there  will 
necessarily  be  conjoined  an  immense  improvement  in  the 
3H  481 


policing  of  trade  routes  both  by  land  and  water ;  and  greater 
additional  security  for  investments  in  China. 

"That  these  resolutions  be  transmitted  to  Lord  Charles 
Beresford,  and  that  copies  thereof  be  sent  to  H.M.*s  Minister 
in  Peking,  the  Shanghai  branch  of  the  Association,  and  the 
Committee  of  the  Association  in  London. 

"F.  Henderson, 

"  Hon.  Secretary. 

"Jno.  J.  Francis, 


Resolutions  of  January  22,  1S99. 

Resolutions  passed  at  the  meeting  of  Chinese  merchants 
and  traders,  and  other  Chinese  gentlemen  resident  in  Hong 
Kong,  interested  in  trade,  held  at  the  Chinese  Chamber  of 
Commerce  Rooms  on  Sunday,  the  2  2d  January,  1899,  at 

On  the  motion  of  Mr.  Ho  T^ung,  seconded  by  Mr.  Leung 
Shiu-Kwong,  it  was  resolved : 

"  I.  Having  closely  followed  with  great  and  attentive 
interest,  and  carefully  considered  what  Lord  Charles 
Beresford  has  said  and  done  in  China  in  connection  with 
his  recent  Mission  on  behalf  of  the  Associated  Chambers 
of  Commerce,  we,  the  Chinese  community  of  Hong  Kong 
here  assembled,  are  in  accord  with  and  heartily  support 
the  policy  the  noble  Lord  proposes  in  regard  to  the  *Open 
Door'  as  regards  commerce,  and  also  with  regard  to  the 
reorganization  of  the  Chinese  Army  under  the  British. 

"2.  That  we  recognize  the  combined  proposals,  if  car- 
ried out,  will  benefit  China  quite  as  much,  if  not  more,  than 
England,  and  other  nations,  in  her  trading  interest,  and 
we  therefore  hope  that  Lord  Charles  will  be  intrusted  by 
the  British  Government  with  the  carrying  out  of  the  views 



he  has  so  closely  enunciated,  as  we,  the  Chinese  people  of 
Hong  Kong,  observe  that  his  efforts  are  directed  to  the 
benefit  of  both  his  country  and  our  country,  and  to  the 
benefit  of  the  trade  of  China  and  the  trade  of  England. 

**  3.  That  we  recognize  and  make  our  cordial  acknowl- 
edgments for  the  sympathetic  manner  with  which  he  has 
approached  our  country ;  and 

"  4.  That  we  desire  to  emphatically  express  our  full 
confidence  in  Lord  Charles  Beresford,  whose  ability,  in- 
tegrity, and  zeal  we  are  sure  peculiarly  fit  him  to  success- 
fully carry  out  the  proposals  he  has  made  for  the  further- 
ance of  trade  and  the  preservation  of  the  Chinese  Empire. 
(Signed)  "Lo  Chi  Tiu,  Chairman. 

"  H.  O.  FooK,  Secretary." 



Eesoiutian  0/  January  8,  1899 

''That  our  cordial  thanks  be  tendered  to  Lord  Charles 
Beresford  for  the  service  he  has  rendered  to  the  foreign  com- 
munities in  China  by  personal  investigation  into  the  conditions 
of  the  various  interests  we  represent.'' 

Memoranda  showing  views  of  British  merchants  are  also  to 
be  found  under  "Canton,"  "  Wuhu,"  and  "Chefoo." 


The  following  is  a  summary  of  the  trade  statistics  given 
under  the  headings  of  the  different  places  mentioned  in  this 
Report.  I  was  unable  to  get  reliable  figures  for  1898,  as  I  left 
China  in  the  early  part  of  January,  1899.  ^  ^^  ^^^o  unable  to 
obtain  trustworthy  figures  at  each  place  of  the  proportionate 
value  of  British  trade,  so  I  have  preferred  to  omit  it  alto- 



gether,  as  the  tonnage  of  shipping  gives  a  fairly  approximate 
idea  of  the  British  preponderance  of  trade  in  China,  which 
amounts  to  64^  of  the  whole  foreign  trade.  The  American 
percentage  is  8^  of  the  whole,  and  the  remaining  28^  is  divided 
among  the  other  foreign  nations,  Japan  Laving  the  larger  share, 
and  Germany  coming  next 

net  value  of 
Trade,  1S97 

Total  tonnage 

Total  British 



of  Shipping 
entered  and 

entered  and 

cleared,  1897 

cleared.  1897 

Haikwan  taels 

Tientsin .    . 










Chefoo    .    . 





Hankow .     . 





Kiukiang    . 





Wuhu     .    . 





Chinkiang  . 





Shanghai     . 





Foochow     . 





Amoy     .     . 





Swatow  .    . 





Canton    .    . 










Hong  Kong 







Peking    .    . 




Definitions  of  Chinese  Weights,  Etc. 

16  taels  =  I  catty. 
I  catty  =  i^  lb.  avoirdupois. 
100  catties  =  i  picul. 

I  picul  =  133^  lbs.  avoirdupois. 
75  catties  =100  lbs.  avoirdupois. 

Six  mou  =  I  acre. 
3.3  li  =  I  mile. 

In  1897,  I  Hk.  (Haikwan  or  Customs) 

tael  =  2X.  11}//.  English. 
"    =  $0.72  American. 



Addis,  C.  S..  Report  on  relation  be- 
tween copper  and  silver  cash,  370- 


Albumen,  167. 

Alcock,  Sir  Rutherford,  Convention 
of,  399. 

Allen,  Mr.,  British  Consul  at  New- 
chwang,  51. 

American  Asiatic  Association,  437. 

American  interests  in  China:  Car 
couplings,  29;  Firms  in  Shanghai, 
93 ;  Flour  trade,  95 ;  Kerosene,  95 ; 
Locomotives,  26 ;  Lumber,  95 ; 
Machinery,  445 ;  Piece  goods  trade, 
92 ;  Railway  material,  49. 

Americans,  Opinions  of,  on  Lord  Ber- 
esford's  Mission,  439 ;  Opinions  of, 
on  Open  Door  policy,  430-437. 443- 

Amoy,  Report  ot  Chamber  of  Com- 
merce, 479 ;  Visit  to,  182. 

Antimony,  165. 

Annies  (see  chapter  on  ''Chinese 
Armies  and  Navies,"  267). 

Army,  Chinese,  Inefficiency  of,  280; 
Reorganization  of,  essential  to  fut- 
ure prosperity,  7,  11,  96,  107,  no, 

139.  143.  I57»  174.  231.  450;  Jap- 
anese, 427;  Russian,  in  Manchuria, 

Arsenal,  at  Osaka,  421 ;  Shanghai, 
294;  Tokio,427. 

Arsenals,  290-302. 

Baldwin  engines,  28,  45. 

Bank,  China  and  Japan,  89 ;  Tientsin, 

Banker  &  Co.,  Case  of,  238-247. 
Banks,  List  of  China,  388. 
Bean  mill,  63. 
Bean  oil,  57. 
Beancake,  34,  57. 
Beans,  34.  40.  57. 
Belgium,  Railway  interests  of,  305. 

Beri-beri,  Disease  of,  431. 
Bradley  &  Co.,  i8a 
Buffalo,  Visit  to.  436. 
Butterfield  &  Swire,  33. 

Canal,  the  Grand,  318,  328. 

Canes,  Canton  trade  in,  235, 260. 

Canton,  Arsenal  of,  301 ;  Exports  of, 
259;  Piracy  of,  248-258;  Trade 
statistics  of,  198-202 ;  Visit  to,  232- 

Capital,  Anglo-Saxon, Opportunity  for, 
170 ;  Demoralization  of,  17  ;  Need 
of,  38 ;  Tientsin  Bank,  16. 

Cassia, Canton  trade  in,  260;  Wnchow, 

Catholics,  and  Vu  Man  Tsu,  141. 

Cavalry,  Chinese,  275  ;  Japanese,  428. 

Cereals  of  Manchuria,  35. 

Chamber  of  Commerce,  Amoy  tea. 
Report  on,  183-184  ;Chinkiang,  Re- 
port no,  121,  131 ;  Shanghai,  Ad- 
dress to  author,  88  ;  Tientsin,  14. 

Chambers  of  Commerce,  Reports  of 
(see  Appendix). 

Chao-Chao  Fu,  178. 

Chefoo,  Convention  of,  240,  244,  247, 
401 ;  Development  of,  66 ;  Gold- 
mines of,  68 ;  Trade,  65  ;  Visit  to, 

Chicago,  Visit  to,  435. 

Cbihli,  Viceroy  of,  292. 

China,  Administration  of,  211 ;  Aliena- 
tion of,  20 ;  American  interest  in, 
433*  447  ;  British  trade  with,  198, 
203 ;  '*  Break-up  '*  of,  effect  of,  20 ; 
Policy  should  be  changed,  84; 
Population  of,  194;  Revenue  sys- 
tem of,  225  ;  Trade  compared  with 
J[apanese,  417. 

Cmna  Association,  Report  of,  480, 

Ching,  Prince,  Interview  with,  2. 

Chingfui  tax,  405. 



Chinkiang,  British  merchants'  report 
on,  133 ;  Chamber  of  Commerce, 
121-475  ;  Trade  statistics  of,  120- 
135  ;  Visit  to,  120. 

Chine- tu,  Arsenal  of,  302. 

Chu-kiang  River,  232. 

Chung  Chi  Tung,  Interview  with,  156; 
Army  of,  276. 

Chungking  trade  with  Newchwang, 

Coal,    Chefoo,    66 ;     Hunan,    164 ; 

Kwangnin,  25 ;    Kwangtun^,  188, 

262;    Nan-Paian,  24;    Mimng  of, 

61 ;  Newchwang,  40  ;  Shuisi,  313  ; 

Statistics  of,  30;  Wuhu,  116. 

Coinage,  Report  on  relation  of  silver 
and  copper,  371. 

Coins,  368 ;  Analysis  of,  371-379. 

Coke,  not  manufactured,  31. 

College,  Visit  to  Imperial  Naval,  no ; 
Visit  to  Military,  112. 

Commerce,  British,  Protection  of ,  211- 
230;  Chambers  of  {see  Appendix); 
Piracy,  No  security  because  of, 
248-258 ;  Protection  lacking,  280. 

Commercial  attache,  351. 

Company,  Japan  Sugar  Refining,  421; 
Mitsu  Bishi,  419  :  Taku  Tug  and 
Lighter,  18;  Union  Steel  andiron, 

Consul,  the  British,  in  China,  348 ; 

Complaints  against,  349-358 ;  Rus- 
sian needed  at  Newchwang,  37. 

Consular  representation,  128. 

Consular  system.  Defects  of  British, 

Convention  of  Chefoo,  240,  244,  247, 


Copper,  Used  in  coinage,  370. 

Corea,  Japan  trade  with,  426;  at  Rus- 
sians mercy,  55. 

Com,  waste  of,  188. 

Cotton,  American  export  of,  445 ; 
Newchwang  trade  in,  58;  Quality 
of  Chinese,  91;  Taxation  of,  410; 
Shanghai  trade  in,  90,  93,  294. 

Cruisers,  English  and  German  built, 

Currency,  {ste  chapter  on),  359  ;  De- 
fects of,  387  ;  Gold,  383 ;  Opinions 
on,  382-386. 

Customs,  Opium,  Report  on  Hong 
Kong,  200  {see  Tariffs,  389). 

Customs  House,  Regulations  of  Shang- 
hai, 77 ;  at  Kowloon,  204. 

Debt,  of  China,  363. 

Deer-horns,  60. 

Dickinson,  W.  W.,  14. 

Dockyards,  of  Mitsu  Bishi  Co.,  419. 

Duck  feathers,  260. 

Duties  (see  chapter  on  **  Tariffs,*'  389), 
Ad  valorem,  415  ;  Opium,  on  Hong 
Kong,  204-210 ;  Preferential,  236 ; 
Railway  materials  exempted  from, 
45  ;  Shanghai  Customs  House  col- 
lection of,  80;  Tientsin,  15;  Tran- 
sit, agreement  of  Chinese  Govern- 
ment concerning,  401. 

Electric  Plant  of  Kioto,  423,  424. 

Emperor,  Interview  with  the  Japanese, 

Evans  &  Pugh,  147. 

Exchange,  Declining  gold,  384. 

Exports  (see  tables,  198,  203,  391), 
American,  to  China,  445  ;  Canton, 
235,  259,  260;  Chinkiang,  136; 
Newchwang,  33,  57,  60  ;  Value  of 
Newchwang  gold,  62 ;  Taxes  on, 
410  ;  Tea,  184 ;  Tientsin,  15  ;  Wu- 
chow,  265. 

Feathers,  167. 

Felt,  60. 

Fergusson,  Mr.,  property  case  of,  69. 

Finance  (see  chapter  on,  359),  Spheres 
of  Influence  and,  367. 

Fire-crackers,  Canton  export  of,  260. 

Fleming,  murder  of,  140. 

Flour,  American  export  of,  445 ;  Fluct- 
uation in  price  of,  375. 

Foochow,  Arsenal  of,  300 ;  Report  of 
Chamber  of  Commerce,  479 ;  Trade 
statistics  of,  169 ;  Visit  to,  169. 

Forests  of  Manchuria,  35. 

Forts  (see  chapter  on  *  *  Forts  and  Arse- 
nals," 290). 

France,  Chinese  interests  of,  99 ;  Han- 
chow  interests  of,  144 ;  SiUc  trade 
of,  259  ;  Sphere  of  influence  of,  in 
Kwaugsi  and  Kwangtung,  235, 260 ; 
in  Yangtse  Valley,  325;  Treaty 
rights  of,  82. 

Furs,  Tientsin  trade  in,  18. 

Germany,  Canton  silk  trade  of,  259; 

Chefoo  controlled  by,  65 ;  England's 

relations  to,  21 ;  Kiao-chow  occupied 

by,  67,  74. 
Gingal,  280. 
Ginseng,  60. 
Glass,  Opening  for  manufacture  of, 

40,  390,  418. 




Gold,  at  Chefoo,  66 ;  Currency,  383 ; 
at  Hunan,  166 ;  at  Newchwang,  62 ; 
in  Yangtse  Valley,  345. 

Gordon,  Chinese,  6. 

Grand  Canal,  Condition  of,  131 ;  Pec- 
ulation of  officials  of,  326. 

Great  Britain,  China  trade,  extent  of, 
6 ;  Canton  silk,  trade  of,  259 ;  China 
trade  with,  192  {see  tables,  198- 
203) ;  Confidence  of  China  in,  231 ; 
Fergusson  case,  action  in,  69  ;  Man- 
churian  trade,  47 ;  Right  of,  to  estab- 
lish shops  in  Canton,  case  of  Banker 
&  Co.,  238-247  ;  Russia,  fear  of, 
f  58 ;  Spheres  of  Influence,  policy  in 
regard  to,  3, 4 ;  Subjects,  inadequate 
protection  of,  212-214. 

Greaves  and  Giddes  &  Co,  case  with 
French  Consul,  145. 

Grieg,  Dr.,  52. 

Haihow,  Value  of  trade  of,  198-202. 

Halliday,  Mr.,  ill. 

Hankow,  Arsenal  of,  299 ;  Geograph- 
ical importance  of,  168 ;  Report  of 
Chamber  of  Commerce  of,  477 ; 
Visit  to,  139. 

Hanyang,  150. 

Harbor  of  Wai-hai-Wei,  best  in  North- 
ern China,  72. 

Hart,  Sir  Robert,  6,  12 ;  Administra- 
tion of,  175. 

Hemp,  40. 

Hides,  Tientsin  trade  in,  18. 

Hisaya,  Baron,  420. 

Ho  Kai,  Address  to  Lord  Beresford, 

Hoi  Chou,  Pirates  of,  250. 

Hong  Kong,  Report  of  Chamber  of 
Commerce,  473  ;  Visit  to,  191-23 X. 

Hosie,  Mr.,  British  Consul  at  Wn- 
chow,  264. 

HsO  Jung  Kwei,  Viceroy  of  Foocfaow, 
Interview  with,  173. 

Hsu  Ving  Kwei,  Army  of,  278. 

Hu  Yen  Mei,  Interview  with,  11. 

Huang  Chin,  Interview  with,  98. 

Hunan,  Manufactures  of.  Mineral 
wealth  of,  164 ;  Soldiers  of,  271. 

IcHANG,    Trade    with    Newchwang, 

Imports  (x^^  tables,  92,  198-203,  391), 

Cotton,  Comparison  of,  for  1887  and 

1897 :    Newchwang,    33,  57 ;    Oil, 

American,  59  ;  Tientsin.  15. 

Iron,    in  Hankow,  153;  Kwangnin, 

25  ;  Kwangtung,  188 ;  Manchuria, 

39.  61. 
Ito,  Marquis,  Interview  witlt,  95,  416. 

{ACKSON,  Mr.  P.,  359. 
apan.  Electricity  as  a  motive  power 
in,  424  ;  Exports  of,  compared  with 
Chinese,  60;  Open  Door  in  China 
desired  by,  431  ;  Trade  of,  com- 
pared with  Chinese,  417 ;  Visit  to, 

Jardine  and  Matheson  Steamship 
Company,  33,  149. 

Junks,  Description  of  river,  323. 

Kaiping,  Cavalry  camp  at,  275. 
Kang  Yu  Wei,  Interview  with,  191- 

Khanpingkhan  pass,  18. 

Kiangzin,  Army  at,  277;  Visit  to,  138. 

Kiaochow,  Visit  to,  73;  German  oc- 
cupation of,  73. 

Kioto,  Electric  plant  of,  423. 

Kirin,  Hospital  at,  52 ;  British  Con- 
sul needed  at,  36,  44. 

Kiukiang,  Report  of  Chamber  of  Com- 
merce, 475  ;  Population  and  trade 
statistics  of,  117. 

Ko  Chun,  Pirates  of,  250. 

Kob^,  Visit  to,  421. 

Kowloon,  204. 

Krupp  guns,  290. 

Kwangnin  coal  and  iron,  25. 

Kwangsi,  British  trade  with,  108-202 ; 
French  Sphere  of  Influence  in,  235  ; 
Silk  exports  of,  259. 

Kwangtung,  British  trade  with,  198- 
202;  French  Sphere  of  Influence  in, 
235  ;  Mineral  wealth  of,  188 ;  Piracy 
on  waterways  of,  248-258 ;  Silk  ex- 
ports of,  259. 

Kwei  Chun,  Interview  with,  97. 

Kwei  Yun,  Interview  with,  261-263. 

Labor,  Cost  of  native,  27  ;  need  of 

skilled,  38. 
Lake  Poyang,  346  ;  Tung  Ting,  345. 
Land,  Russian  policy  in  purchase  of, 


Lang,  Captain,  7. 

Lead,  39,  165. 

Li  Hung  Chang,  12  ;  Proposition  of, 

Likin,  Evils  of,  170,  178,  184,  189, 
234,  238,  241.  333.  406. 

Lin  Kwen  Yi,  Army  of,  277 ;  Inter- 
view with,  106. 



Lo  Tak  Fat,  Statement  on  piraqr  by, 

Loans,  363  ;  Present  prices  of,  368. 

Locomotives,  American,  26, 29 ;  Dabs*5, 

26  ;  Baldwin's,  28,  45. 

••  Loto  Shui,"  410. 

Lumber,  95. 

M AcDoN ALD,  Sir  Claude,  8, 68 ;  Letter 
in  Banker  &  Co.  case,  238. 

Machinery,  American,  26,  49,  445  ; 
German,  70. 

Maize,  40. 

Manchu,  Armies  of,  268. 

Manchuria:  Annexation, Eifect  of  Rus- 
sian, 55 ;  Army  of,  275;  Forests  of, 
35 ;  Foreign  trade  of,  57  ;  Impor- 
tance of,  42  ;  Missions  in,  52 ;  Port 
of,  34;  Resources  of,  35,  61 ;  Rus- 
sian army  in,  32,  34,  36,  47,  287 ; 
Russian  and  British  trade  with, 

Mandarins,  Illegitimate  gains  of,  219- 

Mansfield,  R.  W.,  Consul  at  Canton, 
Letters  in  Banker  &  Co.  case,  238- 
244 ;  Reports  on  piracy  at  Canton, 

Manufactures:  Bricks,  185;  British, 
openings  for,  418 ;  Cannon,  294 ; 
Cotton  goods,  422 ;  Matches,  422  ; 
Munitions  of  war,  294;  Powder, 
293;  Rifles,  294;  Salt,  179;  Steel 
and  iron,  154  ;  at  Tongshan,  25. 

Matches,  Newchwang  trade  in,  57. 

Matting,  Export  trade  of  Canton  in, 
235.  260. 

Mauser  rifles,  in  use  in  Chinese  Army, 
271,  276,  112. 

Maxim  guns,  Chinese  Army  equipped 
with,  271. 

Millet,  40. 

Min  River,  Navigation  of,  170-171. 

Minerals  :  Wealth  of  Hunan  in,  165  ; 
of  Hupeh,  154;  of  Kwangtung, 
179,  188,  262  ;  of  Manchuria,  61- 
62 ;  of  Newchwang,  39. 

Mining  Rights  desired,  38. 

Mint,  at  Tientsin,  293. 

Missions :  Catholic,  at  Hankow,  142 ; 
at  Hunan,  165  ;  Jesuit,  at  Shanghai, 
104 ;     Protestant,    in    Manchuria, 

Mitsu  Bishi  Co.,  Visit  to  docks  of, 


Mongolia,  Absorbed  by  Russia,  55  ; 

Army  in,  275. 

Nankhow  Pass,  18. 

Nanking,  Arsenal  of,  298 ;  Treaty  of, 
237»  238,  395  ;  Visit  to.  io6. 

Nan^ang,  Squadron  of,  284. 

Navigation  Laws,  Anglo-Saxon  trade 
affected  by,  77  ;  Inland,  122. 

Navy,  Report  on  Chinese,  284 ;  on 
Japanese,  419,  430. 

Needles,  40. 

New  York,  Visit  to,  437. 

Newchwang,  Port  of,  33-40 ;  Visit  to, 
32;  Report  of  Chamber  of  Com- 
merce, 471. 

Nieh,  Army  of  Genera],  274. 

Ningpo,  Riots  at  Joss-house  of,  100. 

Northcote,  Sir  Stafford,  i,  459. 

Officials,  Corruption  of  Chinese, 

Oil,  40;  Canton  export  of,  235,  260; 
American  export  of,  446. 

Open  Door,  American  trade,  essential 
for  future  of,  437,  443 ;  Benefits  of, 
to  all  nations,  96, 103,  115 ;  Canton 
merchants  on,  261 ;  Desire  of  Chi- 
nese for,  19  ;  at  Foochow,  172  ;  at 
Hong  Kong,  196,  211  ;  Report  of 
Hong  Kong  merchants  on,  211— 
231  ;  Japanese  trade,  imperative 
for  future  of,  423,  426,  431 ;  at 
Kiao-chow,  67,  74;  Necessity  of,  41 ; 
Only  rational  policy,  454  ;  Tientsin 
Chamber  of  Commerce  on,  470 ;  In 
Yangtse  Valley,  317,  393. 

Opium,  Hong  Kong  duties  on,  204- 

Osaka,  Visit  to,  421. 

Pakhui.    {See  table,  198-202.) 

Paotung,  French  claim  to,  102. 

Paper,  Wuchow  trade  in,  265. 

Pavloff,  M.,  Russian  Chaig^  d* Af- 
faires, I. 

Pease,  Trade  in,  34. 

Peking,  Field  force  of,  275 ;  Gov- 
ernment of,  83-86;  Visit  to,  I. 

Petroleum,  Newchwang  trade  in,  59. 

Peyang,  Squadron  of,  284. 

Pigs'  Bristles,  Canton  trade  in,  260 ; 
Newchwang  trade  in,  62. 

Piracy,  at  Canton,  234  ;  Accounts  of, 
at  Canton,  248-258. 

Police,  Inefficiency  of  Chinese,  4; 
Necessity    for    reorganization    of, 

Population.     {See  Statistics.) 
Port  Arthur,  i. 



Ports,  of  Manchuria,  34 ;  Wei-hai- 
Wei,  71. 

Powder  (sfe  Arsenals)  Manufacture 
of  German  smokeless,  302 ;  Qual- 
ity of  Chinese,  290;  Tientsin  fac- 
tory, 293. 

Preserves,  Kwangsi  and  Kwangtung 
exports  of,  257. 

Prison,  Visit  to  Tokio,  429. 

Railways  {see  chapter  on,  304) :  Bur- 
mah  Extension  Railway,  314  ;  Che- 
foo,  66-69 ;  Hankow-Canton  Rail- 
way, 312,  167;  Kiao-Chow-Yichow- 
Tsman  Railway,  73,  312;  Lu-Han 
Railway,  306;  Pekin  Syndicate 
Railway,  29.  313  ;  Russian  Man- 
churian  Railway,  309 ;  Shanghai- 
Nanking  Railway,  314;  Shanhaik- 
wan  Extension  Railway,  23,  314  ; 
Shanhaikwan-Newchwang  Railway, 
308  ;  Soochow  -  Hanchow  -  Ningjxj 
Railway,  314;  Stretensk-VIadivos- 
tock  Railway,  309 ;  Swatow  and 
Chao-Chao  Fu,  180;  Taiyuan-Fu- 
Chengting  Railway,  311;  Tientsin- 
Chinkiang  Railway,  312 ;  Tonquin- 
Nanning-Fu  Railway,  313;  Trans- 
Manchurian,  44,  48 ;  Wuchow  and 
Chungking,  265. 

Railways,  Essential  for  development, 
II ;  British  interests  in,  305  ;  Ger- 
man interests  in,  303;  Gauge  of, 
316 ;  In  course  of  construction,  306  ; 
In  operation,  304;  Projected,  310; 
Russian  interests  in,  305. 

Reform,  of  Chinese  Government,  211- 

Reforms,  su^ested  by  author,  455. 

Reports  of  Chambers  of  Commerce. 
(S!ee  Appendix.) 

Residence,  No  liberty  to  foreigners 
for  purposes  of  trade,  83  ;  In  inte- 
rior, 126. 

Revenues,  Corruption  of  Chinese,  220- 
225 ;  Amounts  of,  362  ;  New- 
chwang,  56. 

Rice,  187;  Wuchow  trade  in,  265; 
Fluctuation  in  price  of,  375. 

Rifles,  in  use  in  Chinese  army,  279  ; 
Factory  at  Hankow,  299. 

River,  Reports  on,  Han,  343;  Liao, 
342:  Pei  Ho,  341;  Siang,  345; 
Wangpoo,  340;  West,  329;  Yangtse, 
320;  Yellow,  337. 

R i vers.     ( See  Waterways,  318). 

Roods,  346. 

Russia,  Army  of,  in  Manchuria,  286  ; 

British  interests  affected  by,  145  ; 

Manchurian  trade  of,  47 ;  Policy  of, 

I3»  18,  36,  51. 
Russian  courtesy  to  author,  156,  52. 

Salaries,  Official,  220-225;  Evils 
caused  by  small,  364. 

Salt,  Effects  of  illegal  taxation  of,  411 ; 
Swatow  manufacture  of,  179;  Mo- 
nopoly of,  186. 

Salt  Fish,  Trade  in,  185. 

Samshui.    {See  table,  198-202.) 

Schools,  Japanese  military,  427. 

Seaweed,    Kewchwang    Imports    of, 


Shanghai,  Report  of  Chamber  of  Com- 
merce, 472  ;  Visit  to,  76. 

Shansi,  Mineral  wealth  of,  313. 

Shantung,  Soldiers  of,  271. 

Sheng,  Director  of  Chinese  Railway, 
Interview  with,  161. 

Shipbuilding,  Japan,  419 ;  San  Fran- 
cisco, 433. 

Shipping,  British,  41. 

Shiung  Yo,  Trouble  at,  48. 

Siberia,  Position  of  Russian  army  in 
Eastern,  286. 

Silk,  Export  of  Canton,  235-259 ;  of 
Wuchow,  265  :  Taxation  of,  410. 

Silver,  39 ;  Relation  between  copper 
cash  and,  370. 

Singapore,  Emigration  to,  189. 

Skins,  Tientsin  trade  in,  18,  60. 

Soon  Ching,  Army  of  General,  273. 

Spheres  of  Influence,  Canton  mer^ 
chants  protest  against,  259;  Evils 
of,  215-217  ;  Finance  affected  by, 
367 ;  French  in  Kwangsi  and 
Kwangtung,  235 ;  In  Yangtse  Val- 
ley, 325;  llong  Kong,  196;  Result 
of,  452 ;  Shanghai  Chamber  of  Com- 
merce report  on,  468 ;  Yangtse 
Valley  in.  317. 

Spirits,  Trade  in,  40. 

Statistics  {see  Summary  of  Trade), 
483;  Amoy  trade,  182:  Canton 
trade,  232  ;  Chefoo  trade,  65  ;  Chin- 
kiang  trade,  120 ;  Foochow  trade, 
169;  Hankow  trade,  139;  Hong 
Kong  trade,  19 1 ;  Imports  cotton 
into  all  China,  92  ;  Kiukiang  trade, 
117;  Newchwang,  export,  58 ;  trade, 
32 ;  Peking,  i ;  Shanghai,  cotton 
imports,  90;  trade,  76;  Swatow 
trade,  177  ;  Tables,  198-203  ;  Tient- 
sin, 14 ;  Tongshan  coal,  30 ;  Work- 



shop  and  locomotive,  25  ;  Wuchow 
trade,  264  ;  Wuhu  trade,  115. 

Steel,  Hanyang  Mills,  164 ;  Opening 
for  British  manufacture  of,  418; 
used  in  Shanghai  arsenal,  296. 

Stuhlman,  Dr.,  Report  on  copper 
cash,  377. 

Sugar,  Staple  trade  of  Swatow,  177 ; 
Export  of  Wuchow,  265. 

Summary  of  trade  statistics,  483. 

Sung,  Army  of  General,  273. 

Swatow,  Visit  to,  177-181.  (5// table, 

Szechuan,  In  French  Sphere  of  In- 
fluence, 325. 

Tables.  Analysis  of  Coin,  371,  379 ; 
British  trade  with  China,  198 ;  Can- 
ton exports,  259 ;  Cotton  imports 
into  all  China,  92 ;  Currency,  360 ; 
Newchwang  imports,  83  ;  Summary 
of  trade  statistics  of,  483;  Tong- 
shan.  Workshop  and  locomotive  sta- 
tistics, 25. 

Tael,  Commercial  Standard  of,  368. 

Taku  Tug  and  Lighter  Company,  18. 

Tan,  Viceroy  of  Canton :  Letters  in 
Banker  &  Co.  case,  238-244. 

Tan  Chung  Lin.  261  ;  Army  of,  278. 

Taotais,  Officers  of  International 
Board  of  Trade,  171,  181. 

Tariff,  Revision  of,  413.  (Sei  chapter 
on,  389.) 

Tax,  Chingfui,  40s  ;  Evils  of  likin, 
170,  178,  184,  189,  234,  238;  Area 
of  exemption  from  likin,  241  ;  Hai 
Kow,  405  ;  Land,  411. 

Taxation,  Evils  of  illegal,  134,  410  ; 
Chinese  feeling  about,  157. 

Taxes,  Illegal,  405. 

Taylor,  F.  E.,  Report  on  depreciation 
of  silver,  376. 

Tea,  Amoy  trade  in,  182  ;  Foochow, 
170  ;  Formosa,  184  ;  Oolong,  183 ; 
Swatow,  177;  Wuchow,  265. 

Tientsin,  Arsenal  of,  292  ;  Banks  of, 
16;  Mints  of,  293;  Trade  of,  15  ; 
Treaty  of,  242 ;  Report  of  Cham- 
ber of  Commerce  of,  470 ;  Visit  lo, 

Tin,  Trade  in,  165. 

Tobacco,  40. 

Tokio,  Visit  to,  425. 

Tongshan,  Coal-fields  of,  35 ;  Manu- 
factures of,  25. 

Torpedo  Boats,  Gennan  built,  224* 

Trade  (s^e  chapter  on,  389),  American, 
with  China,  444 ;  with  Shanghai, 
92  ;  Amoy,  182  ;  Anglo-Saxon,  De- 
pendent on  Russia's  good-will,  53  ; 
British  extent  of,  5  ;  With  Man- 
churia, 47 ;  Protection  of,  2  ;  In 
Hankow,  139-168;  Canton,  Effect 
of  piracy  on,  248-258  ;  Chefoo,  66  ; 
Chma  compared  with  Japan,  417 ; 
Chinkiang,  Discussion  of,  121 ;  Rus- 
sian occupation  of  Manchuria,  effect 
on,  36 ;  Foreign.  Reason  for  limit- 
ed, 79 ;  Hong  Kong,  191  {set  ta- 
bles, 198  -  203)  ;  Development  of 
foreign,  205  ;  Opium,  204 ;  Intema- 
tionu  Board  of,  171  ;  Manchuria, 
Effect  of  Russian  occupation  on, 
36  ;  Newchwang,  Value  of,  40,  41, 
56  ;  Review  of  1898,  63  ;  Shanghiu, 
76 ;  Cotton,  90,  93 ;  Summary  of 
statistics  of,  483;  Swatow,  177; 
Tientsin,  15  ;  Wahu,  Importance 
of  trade  of,  115. 

Trade  Intelligence  Department,  need 
for,  456. 

Transit  Passes,  Enactment  of  Chefoo 
Convention,   401  ;    Enactment   of 
Tsung  Li  Yamen,  403  ;  Free,  87, 
'  234,  356 ;  Utter  failure,  81. 

Treaty  (j/^  chapter  on  389);  Chefoo, 
401 ;  Nankii^t,  395  ;  Tientsin,  17, 
19,  177,  242. 

Tseng,  His  Excellency,  245. 

Tsung  Chee,  171. 

Tsung -li  Yamen,  2;  Obstacles  to 
plan  of,  159  ;  Interview  with,  a. 

Tug  and  Lighter  Co., Taku,  118. 

Tung  Fu  Chan,  Army  of,  274. 

Union  Steel  and  Iron  Works,  San 

Francisco,  Visit  to,  433. 
United    States,   Competition    of,  in 

cotton  trade,  92,  94 ;  Visit  to,  433. 

Value,  Standard  of,  368. 
Vladivostock,  Russian  dodqfmnlB  at, 

Wade,  Sir  Thomas,  Opinion  on  likin, 

WasBngton».  Visit  to,  436. 
Waterways,  318. 
Wei-hai-Wei,    Population    of,    71; 

Harbors  of,  72. 
Wheat,  187,  188. 
Wong  Chi  Tong,  Visit  to,  163.